In Somalia’s main pirate lair of Haradheere, the sea gangs have set up a cooperative to fund their hijackings offshore, a sort of stock exchange meets criminal syndicate. Heavily armed pirates from the lawless Horn of Africa nation have terrorized shipping lanes in the Indian Ocean and strategic Gulf of Aden, which links Europe to Asia through the Red Sea. The gangs have made tens of millions of dollars from ransoms and a deployment by foreign navies in the area has only appeared to drive the attackers to hunt further from shore. It is a lucrative business that has drawn financiers from the Somali diaspora and other nations — and now the gangs in Haradheere have set up an exchange to manage their investments.

One wealthy former pirate named Mohammed took Reuters around the small facility and said it had proved to be an important way for the pirates to win support from the local community for their operations, despite the dangers involved. “Four months ago, during the monsoon rains, we decided to set up this stock exchange. We started with 15 ‘maritime companies’ and now we are hosting 72. Ten of them have so far been successful at hijacking,” Mohammed said. “The shares are open to all and everybody can take part, whether personally at sea or on land by providing cash, weapons or useful materials … we’ve made piracy a community activity.”

Haradheere, 400 km (250 miles) northeast of Mogadishu, used to be a small fishing village. Now it is a bustling town where luxury 4×4 cars owned by the pirates and those who bankroll them create honking traffic jams along its pot-holed, dusty streets. Somalia’s Western-backed government of President Sheikh Sharif Ahmed is pinned down battling hard-line Islamist rebels, and controls little more than a few streets of the capital. The administration has no influence in Haradheere — where a senior local official said piracy paid for almost everything. “Piracy-related business has become the main profitable economic activity in our area and as locals we depend on their output,” said Mohamed Adam, the town’s deputy security officer. “The district gets a percentage of every ransom from ships that have been released, and that goes on public infrastructure, including our hospital and our public schools.”

In a drought-ravaged country that provides almost no employment opportunities for fit young men, many are been drawn to the allure of the riches they see being earned at sea. Abdirahman Ali was a secondary school student in Mogadishu until three months ago when his family fled the fighting there. Given the choice of moving with his parents to Lego, their ancestral home in Middle Shabelle where strict Islamist rebels have banned most entertainment including watching sport, or joining the pirates, he opted to head for Haradheere. Now he guards a Thai fishing boat held just offshore. “First I decided to leave the country and migrate, but then I remembered my late colleagues who died at sea while trying to migrate to Italy,” he told Reuters. “So I chose this option, instead of dying in the desert or from mortars in Mogadishu.”

Haradheere’s “stock exchange” is open 24 hours a day and serves as a bustling focal point for the town. As well as investors, sobbing wives and mothers often turn up there seeking news of male relatives missing in action. Every week, Mohammed said, gang members and equipment were lost to the sea. But he said the pirates were not deterred. “Ransoms have even increased in recent months from between $2-3 million to $4 million because of the increased number of shareholders and the risks,” he said. “Let the anti-piracy navies continue their search for us. We have no worries because our motto for the job is ‘do or die’.” Piracy investor Sahra Ibrahim, a 22-year-old divorcee, was lined up with others waiting for her cut of a ransom pay-out after one of the gangs freed a Spanish tuna fishing vessel. “I am waiting for my share after I contributed a rocket-propelled grenade for the operation,” she said, adding that she got the weapon from her ex-husband in alimony. “I am really happy and lucky. I have made $75,000 in only 38 days since I joined the ‘company’.”

A basic piracy operation requires a minimum eight to twelve militia prepared to stay at sea for extended periods of time, in the hopes of hijacking a passing vessel. Each team requires a minimum of two attack skiffs, weapons, equipment, provisions, fuel and preferably a supply boat. The costs of the operation are usually borne by investors, some of whom may also be pirates.

To be eligible for employment as a pirate, a volunteer should already possess a firearm for use in the operation. For this ‘contribution’, he receives a ‘class A’ share of any profit. Pirates who provide a skiff or a heavier firearm, like an RPG or a general purpose machine gun, may be entitled to an additional A-share. The first pirate to board a vessel may also be entitled to an extra A-share.

At least 12 other volunteers are recruited as militiamen to provide protection on land of a ship is hijacked, In addition, each member of the pirate team may bring a partner or relative to be part of this land-based force. Militiamen must possess their own weapon, and receive a ‘class B’ share — usually a fixed amount equivalent to approximately US$15,000.

If a ship is successfully hijacked and brought to anchor, the pirates and the militiamen require food, drink, qaad, fresh clothes, cell phones, air time, etc. The captured crew must also be cared for. In most cases, these services are provided by one or more suppliers, who advance the costs in anticipation of reimbursement, with a significant margin of profit, when ransom is eventually paid.

When ransom is received, fixed costs are the first to be paid out. These are typically:
• Reimbursement of supplier(s)
• Financier(s) and/or investor(s): 30% of the ransom
• Local elders: 5 to 10 %of the ransom (anchoring rights)
• Class B shares (approx. $15,000 each): militiamen, interpreters etc.

The remaining sum — the profit — is divided between class-A shareholders.

The crew of the Maersk Alabama, having survived an attack by pirates in Somalia last week, has returned home for a much-deserved rest. But with tensions ratcheting up between the U.S. and the rag-tag confederation of Somali pirates, it’s worth looking to the past for clues on how to tame the outlaw seas. Peter Leeson, an economist at George Mason University (and an occasional Freakonomics guest blogger), offers a brisk and fascinating look at old-school piracy in his new book The Invisible Hook: The Hidden Economics of Pirates. Leeson agreed to sit down and answer some important piratical questions for us:

Q: The Invisible Hook is more than just a clever title. How is it different from Adam Smith’s invisible hand?
A: In Adam Smith, the idea is that each individual pursuing his own self-interest is led, as if by an invisible hand, to promote the interest of society. The idea of the invisible hook is that pirates, though they’re criminals, are still driven by their self-interest. So they were driven to build systems of government and social structures that allowed them to better pursue their criminal ends. They’re connected, but the big difference is that, for Adam Smith, self-interest results in cooperation that generates wealth and makes other people better off. For pirates, self-interest results in cooperation that destroys wealth by allowing pirates to plunder more effectively.

Q: In the book, you write that pirates had set up their own early versions of constitutional democracy, complete with separation of powers, decades before the American Revolution. Was that only possible because they were outlaws, operating entirely outside the control of any government?
A: That’s right. The pirates of the 18th century set up quite a thoroughgoing system of democracy. The reason that the criminality is driving these structures is because they can’t rely on the state to provide those structures for them. So pirates, more than anyone else, needed to figure out some system of law and order to make it possible for them to remain together long enough to be successful at stealing.

Q: So did these participatory, democratic systems give merchant sailors an incentive to join pirate crews, because it meant they were freer among pirates than on their own ships?
A: The sailors had more freedom and better pay as pirates than as merchantmen. But perhaps the most important thing was freedom from the arbitrariness of captains and the malicious abuses of power that merchant captains were known to inflict on their crews. In a pirate democracy, a crew could, and routinely did, depose their captain if he was abusing his power or was incompetent.

Q: You write that pirates weren’t necessarily the bloodthirsty fiends we imagine them to have been. How does the invisible hook explain their behavior?
A: The basic idea is, once we recognize pirates as economic actors, businessmen really, it becomes clear as to why they wouldn’t want to brutalize everyone they overtook. In order to encourage merchantmen to surrender, they needed to communicate the idea that, if you surrender to us, you’ll be treated well. That’s the incentive pirates give for sailors to surrender peacefully. If they wantonly abused their prisoners, as they’re often portrayed as having done, that would have actually undermined the incentive of merchant crews to surrender, which would have caused pirates to incur greater costs. They would have had to battle it out more often, because the merchants would have expected to be tortured indiscriminately if they were captured.

So instead, what we often see in the historical record is pirates displaying quite remarkable feats of generosity. The other side of that, of course, is that if you resisted, they had to unleash, you know, a hellish fury on you. That’s where most of the stories of pirate atrocities come from. That’s not to say that no pirate ever indulged his sadistic impulses. But I speculate that the pirate population had no higher proportion of sadists than legitimate society did. And those sadists among the pirates tended to reserve their sadistic actions for times when it would profit them.

Q: So they never made anyone walk the plank?
A: There was no walking the plank. There’s no historical foundation for that in 17th- or 18th-century piracy.

Q: You write about piracy as a brand. It’s quite a successful one, having lasted for hundreds of years after the pirates themselves were exterminated. What was the key to that success?
A: There was a very particular type of reputation that pirates wanted to cultivate. It was a very delicate line to walk. They didn’t want to have a reputation for wanton brutality or complete madness. They wanted to be perceived as hair-trigger men, men on the edge, who if you pushed, if you resisted, they would snap and do something horrible to you. That way, the captives they took had an incentive to be very careful to comply with all of the pirates’ demands. At the same time, they wanted a reputation as being very brutal, as meting out these brutal, horrible tortures to captives who didn’t comply with their demands. Stories about those horrible tortures were relayed not only by word of mouth, but by early 18th-century newspapers. When a former prisoner was released, he would oftentimes go to the media and provide an account of his capture. So when colonials read these accounts in the media, that helped institutionalize the idea of pirates as these men on the edge. That worked marvelously for pirates. It was a form of advertising performed by legitimate members of society that again helped pirates reduce their costs.

Q: What kinds of lessons can we draw from The Invisible Hook in dealing with modern pirates?
A: We have to recognize that pirates are rational economic actors and that piracy is an occupational choice. If we think of them as irrational, or as pursuing other ends, we’re liable to come up with solutions to the pirate problem that are ineffective. Since we know that pirates respond to costs and benefits, we should think of solutions that alter those costs and benefits to shape the incentives for pirates and to deter them from going into a life of piracy.

“We don’t consider ourselves sea bandits. We consider sea bandits
those who illegally fish in our seas and dump waste in our seas and
carry weapons in our seas. We are simply patrolling our seas. Think of
us like a coast guard.”

Boosaaso, Somalia: This may be one of the most dangerous towns in
Somalia, a place where you can get kidnapped faster than you can wipe
the sweat off your brow. But it is also one of the most prosperous.
Money changers walk around with thick wads of hundred-dollar bills.
Palatial new houses are rising up next to tin-roofed shanties. Men in
jail reminisce, with a twinkle in their eyes, about their days living
like kings. This is the story of Somalia’s booming, not-so-underground
pirate economy. The country is in chaos, countless children are
starving and people are killing one another in the streets of
Mogadishu, the capital, for a handful of grain. But one particular
line of work – piracy – seems to be benefiting quite openly from all
this lawlessness and desperation. This year, Somali officials say,
pirate profits are on track to reach a record $50 million, all of it
tax free.

“These guys are making a killing,” said Mohamud Muse Hirsi, the top
Somali official in Boosaaso, who himself is widely suspected of
working with the pirates, though he vigorously denies it. More than 75
vessels have been attacked this year, far more than any other year in
recent memory. About a dozen have been set upon in the past month
alone, including a Ukrainian freighter packed with tanks, antiaircraft
guns and other heavy weaponry, which was brazenly seized in September.
The pirates use fast-moving skiffs to pull alongside their prey and
scamper on board with ladders or sometimes even rusty grappling hooks.
Once on deck, they hold the crew at gunpoint until a ransom is paid,
usually $1 million to $2 million. Negotiations for the Ukrainian
freighter are still going on, and it is likely that because of all the
publicity, the price for the ship could top $5 million. In Somalia, it
seems, crime does pay. Actually, it is one of the few industries that
does.

“All you need is three guys and a little boat, and the next day you’re
millionaires,” said Abdullahi Omar Qawden, a former captain in
Somalia’s long-defunct navy. People in Garoowe, a town south of
Boosaaso, describe a certain high-rolling pirate swagger. Flush with
cash, the pirates drive the biggest cars, run many of the town’s
businesses – like hotels – and throw the best parties, residents say.
Fatuma Abdul Kadir said she went to a pirate wedding in July that
lasted two days, with nonstop dancing and goat meat, and a band flown
in from neighboring Djibouti. “It was wonderful,” said Fatuma, 21.
“I’m now dating a pirate.”

This is too much for many Somali men to resist, and criminals from all
across this bullet-pocked land are now flocking to Boosaaso and other
notorious pirate dens along the craggy Somali shore. They have turned
these waters into the most dangerous shipping lanes in the world. With
the situation clearly out of control, warships from the United States,
Russia, NATO, the European Union and India are steaming into Somalia’s
waters as part of a reinvigorated, worldwide effort to crush the
pirates. But it will not be easy. The pirates are sea savvy. They are
fearless. They are rich and getting richer, with the latest high-tech
gadgetry like handheld GPS units. And they are united. The immutable
clan lines that have pitted Somalis against one another for decades
are not a problem here. Several captured pirates interviewed in
Boosaaso’s main jail said that they had recently crossed clan lines to
open new, lucrative, multiclan franchises. “We work together,” said
Jama Abdullahi, a jailed pirate. “Good for business, you know?”

The pirates are also sprinkled across thousands of square miles of
water, from the Gulf of Aden, at the narrow doorway to the Red Sea, to
the Kenyan border along the Indian Ocean. Even if the naval ships
manage to catch pirates in the act, it is not clear what they can do.
In September, a Danish warship captured 10 men suspected of being
pirates cruising around the Gulf of Aden with rocket-propelled
grenades and a long ladder. But after holding the suspects for nearly
a week, the Danes concluded that they did not have jurisdiction to
prosecute, so they dumped the pirates on a beach, minus their guns.
Nobody, it seems, has a clear plan for how to tame Somalia’s unruly
seas. Several fishermen along the Gulf of Aden talked about seeing
barrels of toxic waste bobbing in the middle of the ocean. They spoke
of clouds of dead fish floating nearby and rogue fishing trawlers
sucking up not just fish and lobsters but also the coral and the
plants that sustain them. It was abuses like these, several men said,
that turned them from fishermen into pirates. Nor is it even clear
whether Somali authorities universally want the piracy to stop. While
many pirates have been arrested, several fishermen, Western
researchers and more than a half-dozen pirates in jail spoke of
nefarious relationships among fishing companies, private security
contractors and Somali government officials, especially those working
for the semiautonomous regional government of Puntland.

“Believe me, a lot of our money has gone straight into the
government’s pockets,” said Farah Ismail Eid, a pirate who was
captured in nearby Berbera and sentenced to 15 years in jail. His
pirate team, he said, typically divided up the loot this way: 20
percent for their bosses, 20 percent for future missions (to cover
essentials like guns, fuel and cigarettes), 30 percent for the gunmen
on the ship and 30 percent for government officials. Abdi Waheed
Johar, the director general of the fisheries and ports ministry of
Puntland, openly acknowledged in an interview this spring that “there
are government people working with the pirates.” But, he was quick to
add, “It’s just not us.”

What is happening off Somalia’s shores is basically an extension of
the corrupt, violent free-for-all that has raged on land for 17 years
since the central government imploded in 1991. The vast majority of
Somalis lose out. Young thugs who are willing to serve as muscle get a
job, albeit a low-paying one, that significantly reduces their life
expectancy. And a select few warlords, who have sat down and figured
out how to profit off the anarchy, make a fortune. Take Boosaaso, once
a thriving port town on the Gulf of Aden. Piracy is killing off the
remains of the local fishing industry because export companies are
staying away. It has spawned a kidnapping business on shore, which in
turn has scared away many humanitarian agencies and the food, medicine
and other forms of desperately needed assistance they bring. Reporting
in Boosaaso two weeks ago required no fewer than 10 hired gunmen
provided by the Puntland government to discourage any would-be
kidnappers.

Few large cargo ships come here anymore, depriving legitimate
government operations of much-needed port taxes. Just about the only
ships willing to risk the voyage are small, wooden, putt-putt
freighters from India, essentially floating jalopies from another era.
“We can’t survive off this,” said Bile Qabowsade, a Puntland official.
The shipping problems have contributed to food shortages, skyrocketing
inflation and less work for the sinewy stevedores who trudge out to
Boosaaso’s beach every morning and stare in vain at the bright
horizon, their bare feet planted in the hot sand, hoping a ship will
materialize so they will be able to make a few pennies hauling 100-
pound sacks of sugar on their backs.

And yet, suspiciously, there has been a lot of new construction in
Boosaaso. There is an emerging section of town called New Boosaaso
with huge homes rising above the bubble-shaped huts of refugees and
the iron-sided shacks that many fishermen call home. These new houses
cost several hundred thousand dollars. Many are painted in garish
colors and protected by high walls. Even so, Boosaaso is still a
crumbling, broke, rough-and-tumble place, decaying after years of
neglect like so much of war-ravaged Somalia. It is also dangerous in
countless ways. On Wednesday, suicide bombers blew up two government
offices, most likely the work of Islamist radicals trying to turn
Somalia into an Islamist state. Of course, no Somali government
official would openly admit that New Boosaaso’s minicastles were built
with pirate proceeds. But many people, including United Nations
officials and Western diplomats, suspect that is the case.

Several jailed pirates have accused Muse, a former warlord who is now
Puntland’s president, of being paid off. Officials in neighboring
Somaliland, a breakaway region of northwestern Somalia, said they
recently organized an antipiracy sting operation and arrested Muse’s
nephew, who was carrying $22,000 in cash. “Top Puntland officials
benefit from piracy, even if they might not be instigating it,” said
Roger Middleton, a researcher at the Royal Institute of International
Affairs in London. Actually, he added, “all significant political
actors in Somalia are likely benefiting from piracy.” But Muse said he
did not know anything about this. “We are the leaders of this
country,” he said. “Everybody we suspect, we fire from work.”

He said that Puntland was taking aggressive action against the
pirates. And Boosaaso’s main jail may be proof of that. The other day,
a dozen pirates were hanging out in the yard under a basketball hoop.
And that was just the beginning. “Pirates, pirates, pirates,” said
Gure Ahmed, a Canadian-Somali inmate of the jail, charged with murder.
“This jail is full of pirates. This whole city is pirates.” In other
well-known pirate dens, like Garoowe, Eyl, Hobyo and Xarardheere,
pirates have become local celebrities. Said Farah, 32, a shopkeeper in
Garoowe, said the pirates seemed to have money to burn. “If they see a
good car that a guy is driving,” he said, “they say, ‘How much? If
it’s 30 grand, take 40 and give me the key.’ ”

Every time a seized ship tosses its anchor, it means a pirate shopping
spree. Sheep, goats, water, fuel, rice, spaghetti, milk and cigarettes
– the pirates buy all of this, in large quantities, from small towns
up and down the Somali coast. Somalia’s seafaring thieves are not like
the Barbary pirates, who terrorized European coastal towns hundreds of
years ago and often turned their hostages into galley slaves chained
to the oars. Somali pirates are known as relatively decent hosts,
usually not beating their hostages and keeping them well-fed until
payday comes. “They are normal people,” said Said. “Just very, very
rich.”

Nairobi, Kenya — The Somali pirates who hijacked a Ukrainian freighter
loaded with tanks, artillery, grenade launchers and ammunition said in
an interview on Tuesday that they had no idea the ship was carrying
arms when they seized it on the high seas. “We just saw a big ship,”
the pirates’ spokesman, Sugule Ali, said in a telephone interview. “So
we stopped it.” The pirates quickly learned, though, that their booty
was an estimated $30 million worth of heavy weaponry, heading for
Kenya or Sudan, depending on whom you ask.

In a 45-minute interview, Mr. Sugule spoke on everything from what the
pirates wanted (“just money”) to why they were doing this (“to stop
illegal fishing and dumping in our waters”) to what they had to eat on
board (rice, meat, bread, spaghetti, “you know, normal human-being
food”). He said that so far, in the eyes of the world, the pirates had
been misunderstood. “We don’t consider ourselves sea bandits,” he
said. “We consider sea bandits those who illegally fish in our seas
and dump waste in our seas and carry weapons in our seas. We are
simply patrolling our seas. Think of us like a coast guard.”

The pirates who answered the phone call on Tuesday morning said they
were speaking by satellite phone from the bridge of the Faina, the
Ukrainian cargo ship that was hijacked about 200 miles off the coast
of Somalia on Thursday. Several pirates talked but said that only Mr.
Sugule was authorized to be quoted. Mr. Sugule acknowledged that they
were now surrounded by American warships, but he did not sound afraid.
“You only die once,” Mr. Sugule said.

He said that all was peaceful on the ship, despite unconfirmed reports
from maritime organizations in Kenya that three pirates were killed in
a shootout among themselves on Sunday or Monday night. He insisted
that the pirates were not interested in the weapons and had no plans
to sell them to Islamist insurgents battling Somalia’s weak
transitional government. “Somalia has suffered from many years of
destruction because of all these weapons,” he said. “We don’t want
that suffering and chaos to continue. We are not going to offload the
weapons. We just want the money.” He said the pirates were asking for
$20 million in cash; “we don’t use any other system than cash.” But he
added that they were willing to bargain. “That’s deal-making,” he
explained.

Piracy in Somalia is a highly organized, lucrative, ransom-driven
business. Just this year, pirates hijacked more than 25 ships, and in
many cases, they were paid million-dollar ransoms to release them. The
juicy payoffs have attracted gunmen from across Somalia, and the
pirates are thought to number in the thousands. The piracy industry
started about 10 to 15 years ago, Somali officials said, as a response
to illegal fishing. Somalia’s central government imploded in 1991,
casting the country into chaos. With no patrols along the shoreline,
Somalia’s tuna-rich waters were soon plundered by commercial fishing
fleets from around the world. Somali fishermen armed themselves and
turned into vigilantes by confronting illegal fishing boats and
demanding that they pay a tax. “From there, they got greedy,” said
Mohamed Osman Aden, a Somali diplomat in Kenya. “They starting
attacking everyone.”

By the early 2000s, many of the fishermen had traded in their nets for
machine guns and were hijacking any vessel they could catch: sailboat,
oil tanker, United Nations-chartered food ship. “It’s true that the
pirates started to defend the fishing business,” Mr. Mohamed said.
“And illegal fishing is a real problem for us. But this does not
justify these boys to now act like guardians. They are criminals. The
world must help us crack down on them.” The United States and several
European countries, in particular France, have been talking about ways
to patrol the waters together. The United Nations is even considering
something like a maritime peacekeeping force. Because of all the
hijackings, the waters off Somalia’s coast are considered the most
dangerous shipping lanes in the world.

On Tuesday, several American warships — around five, according to one
Western diplomat — had the hijacked freighter cornered along the
craggy Somali coastline. The American ships allowed the pirates to
bring food and water on board, but not to take weapons off. A Russian
frigate is also on its way to the area. Lt. Nathan Christensen, a Navy
spokesman, said on Tuesday that he had heard the unconfirmed reports
about the pirate-on-pirate shootout, but that the Navy had no more
information. “To be honest, we’re not seeing a whole lot of activity”
on the ship, he said.

In Washington, Geoff Morrell, the Pentagon press secretary, declined
to discuss any possible American military operations to capture the
ship. “Our concern is right now making sure that there’s a peaceful
resolution to this, that this cargo does not end up in the hands of
anyone who would use it in a way that would be destabilizing to the
region,” Mr. Morrell told reporters at the Pentagon. He said the
United States government was not involved in any negotiations with the
pirates. He also said he had no information about reports that the
pirates had exchanged gunfire among themselves.

Kenyan officials continued to maintain that the weapons aboard were
part of a legitimate arms deal for the Kenyan military, even though
several Western diplomats, Somali officials and the pirates themselves
said the arms were part of a secret deal to funnel weapons to southern
Sudan. Somali officials are urging the Western navies to storm the
ship and arrest the pirates because they say that paying ransoms only
fuels the problem. Western diplomats, however, have said that such a
commando operation would be very difficult because the ship is full of
explosives and the pirates could use the 20 crew members as human
shields.

Mr. Sugule said his men were treating the crew members well. (The
pirates would not let the crew members speak on the phone, saying it
was against their rules.) “Killing is not in our plans,” he said. “We
only want money so we can protect ourselves from hunger.” When asked
why the pirates needed $20 million to protect themselves from hunger,
Mr. Sugule laughed and said, “Because we have a lot of men.”

Somali pirates in small boats hijacked the Faina, a Belize-flagged
cargo ship owned and operated by Kaalbye Shipping Ukraine, on Sept.
25. Sugule Ali, the spokesman for the Somali pirates holding hostage
the Faina, a Ukrainian freighter loaded with weapons, spoke to me by
satellite telephone today from the bridge of the seized ship. In the
holds of the Faina, which the pirates seized on Thursday, are 33
Russian-built battle tanks and crates of grenade launchers, anti-
aircraft guns, ammunition and other explosives. American officials
fear that the weapons could fall into the hands of radical Islamist
insurgents who are battling Somalia’s weak government. My questions
were translated into Somali, and Mr. Ali’s responses into English, by
a translator employed by The New York Times.

Q. Tell us how you discovered the weapons on board.
A. As soon as we get on a ship, we normally do what is called a
control. We search everything. That’s how we found the weapons. Tanks,
anti-aircraft, artillery. That’s all we will say right now.

Q. Were you surprised?
A. No, we weren’t surprised. We know everything goes through the sea.
We see people who dump waste in our waters. We see people who
illegally fish in our waters. We see people doing all sorts of things
in our waters.

Q. Are you going to sell the weapons to insurgents?
A. No. We don’t want these weapons to go to anyone in Somalia. Somalia
has suffered from many years of destruction because of all these
weapons. We don’t want that suffering and chaos to continue. We are
not going to offload the weapons. We just want the money.

Q. How much?
A. $20 million, in cash. We don’t use any other system than cash.

Q. Will you negotiate?
A. That’s deal making. Common sense says human beings can make deals.

Q. Right now, the American Navy has you surrounded. Are you scared?
A. No, we’re not scared. We are prepared. We are not afraid because we
know you only die once.

Q. Will you kill the hostages if attacked?
A. Killing is not in our plans. We don’t want to do anything more than
the hijacking.

Q. What will you do with the money?
A. We will protect ourselves from hunger.

Q. That’s a lot of money to protect yourselves from hunger.
A. Yes, because we have a lot of men and it will be divided amongst
all of us.

Q. [There are 20 crew members, most of them Ukrainian, being held
hostage.] How are you interacting with the hostages? Eating with them?
Playing cards?
A. We interact with each other in an honorable manner. We are all
human beings. We talk to one another, and because we are in the same
place, we eat together.

Q. What if you were told you could leave peacefully, without arrest,
though without any ransom money. Would you do it?
A. [With a laugh] We’re not afraid of arrest or death or any of these
things. For us, hunger is our enemy.

Q. Have the pirates been misunderstood?
A. We don’t consider ourselves sea bandits [”sea bandit” is one way
Somalis translate the English word pirate]. We consider sea bandits
those who illegally fish in our seas and dump waste in our seas and
carry weapons in our seas. We are simply patrolling our seas. Think of
us like a coast guard.

Q. Why did you want to become a pirate?
A. We are patrolling our seas. This is a normal thing for people to do
in their regions.

Q. Isn’t what you are doing a crime? Holding people at gunpoint?
A. If you hold hostage innocent people, that’s a crime. If you hold
hostage people who are doing illegal activities, like waste dumping or
fishing, that is not a crime.

Q. What has this Ukrainian ship done that was a crime?
A. To go through our waters carrying all these weapons without
permission.

Q. What is the name of your group? How many ships have you hijacked
before?
A. I won’t say how many ships we have hijacked. I won’t talk about
that. Our name is the Central Region Coast Guard.

Nairobi, Kenya — With a Russian frigate closing in and a half-dozen
U.S. warships within shouting distance, the pirates holding a tanker
off Somalia’s coast might appear to have no other choice than to wave
the white flag. But that’s not how it works in Somalia, a failed state
where a quarter of children die before they turn 5, where anybody with
a gun controls the streets and where every public institution has
crumbled. The 11-day standoff aboard the Ukrainian MV Faina begs the
question: How can a bunch of criminals from one of the poorest and
most wretched countries on Earth face off with some of the world’s
richest and well-armed superpowers?

“They have enough guns to fight for another 20 years,” Ted Dagne, a
Somalia analyst in Washington, told The Associated Press. “And there
is no way to win a battle when the other side is in a suicidal mind
set.” In Somalia, pirates are better-funded, better-organized and
better-armed than one might imagine in a country that has been in
tatters for nearly two decades. They have the support of their
communities and rogue members of the government — some pirates even
promise to put ransom money toward building roads and schools. With
most attacks ending with million-dollar payouts, piracy is considered
the biggest economy in Somalia. Pirates rarely hurt their hostages,
instead holding out for a huge payday. The strategy works well: A
report Thursday by a London-based think tank said pirates have raked
in up to $30 million in ransoms this year alone. “If we are attacked
we will defend ourselves until every last one of us dies,” Sugule Ali,
a spokesman for the pirates aboard the Faina, said in an interview
over satellite telephone from the ship, which is carrying 33 battle
tanks, military weapons and 21 Ukrainian and Latvian and Russian
hostages. One Russian has reportedly died, apparently of illness. The
pirates are demanding $20 million ransom, and say they will not lower
the price. “We only need money and if we are paid, then everything
will be OK,” he said. “No one can tell us what to do.”

Ali’s bold words come even though his dozens of fighters are
surrounded by U.S. warships and American helicopters buzz overhead.
Moscow has sent a frigate, which should arrive within days. Jennifer
Cooke of the Center for Strategic and International Studies in
Washington said hostage-taking is the key to the pirates’ success
against any military muscle looming from the U.S. and Russia. “Once
you have a crew at gunpoint, you can hold six U.S. naval warships at
bay and they don’t have a whole lot of options except to wait it out,”
Cooke said. The pirates have specifically warned against the type of
raids carried out twice this year by French commandos to recover
hijacked vessels. The French used night vision goggles and helicopters
in operations that killed or captured several pirates, who are now
standing trial in Paris. But the hostages are not the bandits’ only
card to play. Often dressed in military fatigues, pirates travel in
open skiffs with outboard engines, working with larger mother ships
that tow them far out to sea. They use satellite navigational and
communications equipment and an intimate knowledge of local waters,
clambering aboard commercial vessels with ladders and grappling hooks.

They are typically armed with automatic weapons, anti-tank rocket
launchers and grenades — weaponry that is readily available throughout
Somalia, where a bustling arms market operates in the center of the
capital. They also have the support of their communities and some
members of local administrations, particularly in Puntland, a
semiautonomous region in northeast Somalia that is a hotbed for
piracy, officials and pirates have told the AP. Abdulqadir Muse Yusuf,
a deputy minister of ports in Puntland, acknowledged there were
widespread signs that Puntland officials, lawmakers and government
officials are “involved or benefiting from piracy” and said
investigations were ongoing. He would not elaborate. Piracy has
transformed the region around the town of Eyl, near where many
hijacked ships are anchored brought while pirates negotiate ransoms.
“Pirates buy new luxury cars and marry two, three, or even four
women,” said Mohamed, an Eyl resident who refused to give his full
name for fear of reprisals from the pirates. “They build new homes —
the demand for construction material is way up.” He said most of the
well-known pirates promise to build roads and schools in addition to
homes for themselves. But for now, Mohamed says he has only seen
inflation skyrocket as the money pours in. “One cup of tea is about
$1,” he said. Before the piracy skyrocketed, tea cost a few cents.

Piracy in Somalia is nothing new, as bandits have stalked the seas for
years. But this year’s surge in attacks — nearly 30 so far — has
prompted an unprecedented international response. The Faina has been
the highest-profile attack because of its dangerous cargo. The U.S.
fears the arms could end up in the hands of al-Qaida-linked militants
in a country seen as a key battleground on terror. The United States
has been leading international patrols to combat piracy along
Somalia’s unruly 1,880-mile coast, the longest in Africa and near key
shipping routes. In June, the U.N. Security Council passed a
resolution that would allow countries to chase and arrest pirates
after attacks increased this year. But still, the attacks continue.
Dagne, an analyst in Washington, said that unless the roots of the
problem are solved — poverty, disease, violence — piracy will only
flourish. “You have a population that is frustrated, alienated, angry
and hopeless,” Dagne said. “This generation of Somalis grew up
surrounded by abject poverty and violence.”

A tense standoff has developed in waters off Somalia over an Iranian
merchant ship laden with a mysterious cargo that was hijacked by
pirates. Somali pirates suffered skin burns, lost hair and fell
gravely ill “within days” of boarding the MV Iran Deyanat. Some of
them died. Andrew Mwangura, the director of the East African
Seafarers’ Assistance Programme, told the Sunday Times: “We don’t
know exactly how many, but the information that I am getting is that
some of them had died. There is something very wrong about that ship.”

The vessel’s declared cargo consists of “minerals” and “industrial
products”. But officials involved in negotiations over the ship are
convinced that it was sailing for Eritrea to deliver small arms and
chemical weapons to Somalia’s Islamist rebels. The drama over the Iran
Deyanat comes as speculation grew this week about whether the South
African Navy would send a vessel to join the growing multinational
force in the region. A naval spokesman, Lieutenant-Commander Greyling
van den Berg, told the Sunday Times that the navy had not been ordered
by the government to become involved in “the Somali pirate issue”.

About 22000 ships a year pass through the Suez Canal and the Gulf of
Aden, where regional instability and “no-questions-asked” ransom
payments have led to a dramatic rise in attacks on vessels by heavily
armed Somali raiders in speedboats. The Iran Deyanat was sailing in
those waters on August 21, past the Horn of Africa and about 80
nautical miles southeast of Yemen, when it was boarded by about 40
pirates armed with AK-47s and rocket-propelled grenades. They were
alleged members of a crime syndicate said to be based at Eyl, a small
fishing village in northern Somalia.

The ship is owned and operated by the Islamic Republic of Iran
Shipping Lines, or IRISL, a state-owned company run by the Iranian
military. According to the US Treasury Department, the IRISL regularly
falsifies shipping documents to hide the identity of end users, uses
generic terms to describe shipments and operates under various covers
to circumvent United Nations sanctions. The ship set sail from
Nanjing, China, at the end of July. According to its manifest, it was
heading for Rotterdam where it would unload 42500 tons of iron ore and
“industrial products” purchased by a German client. At Eyl, the ship
was secured by more pirates — about 50 on board, and another 50 on
shore.

But within days those who had boarded the ship developed mysterious
health trouble. This was also confirmed by Hassan Allore Osman,
minister of minerals and oil in Puntland, an autonomous region of
Somalia. He headed a delegation sent to Eyl when news of the toxic
cargo and illnesses surfaced. He told one news publication, The Long
War Journal, that during the six days he had negotiated with the
pirates, a number of them had become sick and died. “That ship is
unusual,” he was quoted as saying. “It is not carrying a normal
shipment.”

The pirates did reveal that they had tried to inspect the ship’s cargo
containers when some of them fell sick — but the containers were
locked. Osman’s delegation spoke to the ship’s captain and its
engineer by cellphone, demanding to know more about the cargo.
Initially it was claimed the cargo contained “crude oil”; later it was
said to be “minerals”. And Mwangura has added: “Our sources say it
contains chemicals, dangerous chemicals.” But IRISL has denied that —
and threatened legal action against Mwangura. The company has
reportedly paid the pirates 200000 — the first of several “ransom
instalments”, but that, too, has been denied.

Somali pirates have accused European firms of dumping toxic waste off
the Somali coast and are demanding an $8m ransom for the return of a
Ukranian ship they captured, saying the money will go towards cleaning
up the waste. The ransom demand is a means of “reacting to the toxic
waste that has been continually dumped on the shores of our country
for nearly 20 years”, Januna Ali Jama, a spokesman for the pirates,
based in the semi-autonomous region of Puntland, said. “The Somali
coastline has been destroyed, and we believe this money is nothing
compared to the devastation that we have seen on the seas.”

The pirates are holding the MV Faina, a Ukrainian ship carrying tanks
and military hardware, off Somalia’s northern coast. According to the
International Maritime Bureau, 61 attacks by pirates have been
reported since the start of the year. While money is the primary
objective of the hijackings, claims of the continued environmental
destruction off Somalia’s coast have been largely ignored by the
regions’s maritime authorities.

Dumping allegations
Ahmedou Ould-Abdallah, the UN envoy for Somalia confirmed to Al
Jazeera the world body has “reliable information” that European and
Asian companies are dumping toxic waste, including nuclear waste, off
the Somali coastline. “I must stress however, that no government has
endorsed this act, and that private companies and individuals acting
alone are responsible,” he said. Allegations of the dumping of toxic
waste, as well as illegal fishing, have circulated since the early
1990s. But evidence of such practices literally appeared on the
beaches of northern Somalia when the tsunami of 2004 hit the country.

The UN Environment Programme (UNEP) reported the tsunami had
washed up rusting containers of toxic waste on the shores of Puntland.
Nick Nuttall, a UNEP spokesman, told Al Jazeera that when the barrels
were smashed open by the force of the waves, the containers exposed
a “frightening activity” that has been going on for more than decade.
“Somalia has been used as a dumping ground for hazardous waste
starting in the early 1990s, and continuing through the civil war
there,” he said. “European companies found it to be very cheap to get
rid of the waste, costing as little as $2.50 a tonne, where waste
disposal costs in Europe are something like $1000 a tonne. “And the
waste is many different kinds. There is uranium radioactive waste.
There is lead, and heavy metals like cadmium and mercury. There is
also industrial waste, and there are hospital wastes, chemical wastes
– you name it.”

Nuttall also said that since the containers came ashore, hundreds of
residents have fallen ill, suffering from mouth and abdominal
bleeding, skin infections and other ailments. “We [the UNEP] had
planned to do a proper, in-depth scientific assessment on the
magnitude of the problem. But because of the high levels of insecurity
onshore and off the Somali coast, we are unable to carry out an
accurate assessment of the extent of the problem,” he said. However,
Ould-Abdallah claims the practice still continues. “What is most
alarming here is that nuclear waste is being dumped. Radioactive
uranium waste that is potentially killing Somalis and completely
destroying the ocean,” he said.

Toxic waste
Ould-Abdallah declined to name which companies are involved in waste
dumping, citing legal reasons. But he did say the practice helps fuel
the 18-year-old civil war in Somalia as companies are paying Somali
government ministers to dump their waste, or to secure licences and
contracts. “There is no government control … and there are few
people with high moral ground … [and] yes, people in high positions
are being paid off, but because of the fragility of the TFG
[Transitional Federal Government], some of these companies now no
longer ask the authorities – they simply dump their waste and leave.”

Ould-Abdallah said there are ethical questions to be considered
because the companies are negotiating contracts with a government that
is largely divided along tribal lines. “How can you negotiate these
dealings with a country at war and with a government struggling to
remain relevant?” In 1992, a contract to secure the dumping of toxic
waste was made by Swiss and Italian shipping firms Achair Partners and
Progresso, with Nur Elmi Osman, a former official appointed to the
government of Ali Mahdi Mohamed, one of many militia leaders involved
in the ousting of Mohamed Siad Barre, Somalia’s former president. At
the request of the Swiss and Italian governments, UNEP investigated
the matter. Both firms had denied entering into any agreement with
militia leaders at the beginning of the Somali civil war. Osman also
denied signing any contract.

‘Mafia involvement’
However, Mustafa Tolba, the former UNEP executive director, told Al
Jazeera that he discovered the firms were set up as fictitious
companies by larger industrial firms to dispose of hazardous waste.
“At the time, it felt like we were dealing with the Mafia, or some
sort of organised crime group, possibly working with these industrial
firms,” he said. “It was very shady, and quite underground, and I
would agree with Ould-Abdallah’s claims that it is still going on…
Unfortunately the war has not allowed environmental groups to
investigate this fully.”

The Italian mafia controls an estimated 30 per cent of Italy’s waste
disposal companies, including those that deal with toxic waste. In
1998, Famiglia Cristiana, an Italian weekly magazine, claimed that
although most of the waste-dumping took place after the start of the
civil war in 1991, the activity actually began as early as 1989 under
the Barre government. Beyond the ethical question of trying to secure
a hazardous waste agreement in an unstable country like Somalia, the
alleged attempt by Swiss and Italian firms to dump waste in Somalia
would violate international treaties to which both countries are
signatories.

Legal ramifications
Switzerland and Italy signed and ratified the Basel Convention on the
Control of Transboundary Movements of Hazardous Wastes and their
Disposal, which came into force in 1992. EU member states, as well as
168 other countries have also signed the agreement. The convention
prohibits waste trade between countries that have signed the
convention, as well as countries that have not signed the accord
unless a bilateral agreement had been negotiated. It is also prohibits
the shipping of hazardous waste to a war zone. Abdi Ismail Samatar,
professor of Geography at the University of Minnesota, told Al Jazeera
that because an international coalition of warships has been deployed
to the Gulf of Aden, the alleged dumping of waste must have been
observed.

Environmental damage
“If these acts are continuing, then surely they must have been seen by
someone involved in maritime operations,” he said. “Is the cargo aimed
at a certain destination more important than monitoring illegal
activities in the region? Piracy is not the only problem for Somalia,
and I think it’s irresponsible on the part of the authorities to
overlook this issue.” Mohammed Gure, chairman of the Somalia Concern
Group, said that the social and environmental consequences will be
felt for decades. “The Somali coastline used to sustain hundreds of
thousands of people, as a source of food and livelihoods. Now much of
it is almost destroyed, primarily at the hands of these so-called
ministers that have sold their nation to fill their own pockets.” Ould-
Abdallah said piracy will not prevent waste dumping. “The intentions
of these pirates are not concerned with protecting their environment,”
he said. “What is ultimately needed is a functioning, effective
government that will get its act together and take control of its
affairs.”

“I am 42 years old and have nine children. I am a boss with boats
operating in the Gulf of Aden and the Indian Ocean. I finished high
school and wanted to go to university but there was no money. So I
became a fisherman in Eyl in Puntland like my father, even though I
still dreamed of working for a company. That never happened as the
Somali government was destroyed [in 1991] and the country became
unstable.

At sea foreign fishing vessels often confronted us. Some had no
licence, others had permission from the Puntland authorities but did
not want us there to compete. They would destroy our boats and force
us to flee for our lives. I started to hijack these fishing boats in
1998. I did not have any special training but was not afraid. For our
first captured ship we got $300,000. With the money we bought AK-47s
and small speedboats. I don’t know exactly how many ships I have
captured since then but I think it is about 60. Sometimes when we are
going to hijack a ship we face rough winds, and some of us get sick
and some die.

We give priority to ships from Europe because we get bigger ransoms.
To get their attention we shoot near the ship. If it does not stop we
use a rope ladder to get on board. We count the crew and find out
their nationalities. After checking the cargo we ask the captain to
phone the owner and say that have seized the ship and will keep it
until the ransom is paid. We make friends with the hostages, telling
them that we only want money, not to kill them. Sometimes we even eat
rice, fish, pasta with them. When the money is delivered to our ship
we count the dollars and let the hostages go.

Then our friends come to welcome us back in Eyl and we go to Garowe in
Land Cruisers. We split the money. For example, if we get $1.8m, we
would send $380,000 to the investment man who gives us cash to fund
the missions, and then divide the rest between us. Our community
thinks we are pirates getting illegal money. But we consider ourselves
heroes running away from poverty. We don’t see the hijacking as a
criminal act but as a road tax because we have no central government
to control our sea. With foreign warships now on patrol we have
difficulties. But we are getting new boats and weapons. We will not
stop until we have a central government that can control our sea.”

Somali pirates have struck again in the Gulf of Aden, hijacking
another ship a day after seizing a Saudi oil supertanker with a cargo
worth $100m. The Delight, a Hong Kong-registered vessel carrying
33,000 tonnes of wheat, was sailing to Iran with 25 crew members when
it was seized, Chinese state news agency Xinhua said. A spokesman for
the US Navy’s Fifth Fleet in the Gulf confirmed on Tuesday that the
Delight had been hijacked. A Hong Kong government spokesman said
“this could be a serious matter for us. We will deal with it”.

Saudi tanker anchored
News of the latest hijack came as the hijackers of the Saudi Sirius
Star – the biggest vessel ever hijacked – anchored the vessel off
Somalia. The vessel was seized in the Indian ocean off East Africa on
Sunday in the boldest attack by pirates operating from lawless
Somalia. “We can confirm the ship is anchoring off the Somali coast at
Haradheere,” Lieutenant Nathan Christensen, a spokesman for the US
Fifth Fleet, said on Tuesday. Haradheere is situated roughly in the
centre of Somalia’s coastline.

The supertanker had been heading for the US via the Cape of Good Hope
at the southern tip of Africa, instead of heading through the Gulf of
Aden and the Suez Canal. The hijacking occurred despite an
international naval response, including from the Nato alliance and
European Union, to protect one of the world’s busiest shipping areas.
US, French and Russian warships are also off the Somali coast. The
pirates have driven up insurance costs, forced some ships to go round
South Africa instead of through the Suez Canal and secured millions of
dollars in ransoms. Last week, the European Union, in its first-ever
naval mission, launched a security operation off the coast of Somalia
to combat growing piracy and protect ships carrying aid agency
deliveries.

Outrageous act
Prince Saud al-Faisal, Saudi Arabia’s foreign minister called the
hijacking of the Sirius Star an outrageous act and promised to back an
EU-led initiative to step up security in shipping lanes off Africa’s
east coast. “This outrageous act by the pirates, I think, will only
reinforce the resolve of the countries of the Red Sea and
internationally to fight piracy,” he told reporters in Athens. The
vessel owned by Saudi oil giant Aramco was fully loaded when it was
attacked on Sunday more than 450 nautical miles southeast of Mombasa.
The standoff comes as another ship is seized off the coast of Somalia.
According to the International Maritime Bureau (IMB), a Thai fishing
boat with 16 crew members has been hijacked. Noel Choong, head of the
IMB piracy reporting centre, based in Kuala Lumpur, said the ship was
seized in the Gulf of Aden on Monday. Eight ships have now been
hijacked in the past two weeks.

‘Hitting the jackpot’
Andrew Mwangura, co-ordinator of the East African Seafarers’
Association, said: “The world has never seen anything like this …
The Somali pirates have hit the jackpot.” The association, based in
the Kenyan port city of Mombasa, has been monitoring piracy for years.
Mwangura said he thought a hijacked Nigerian tug was a “mother-ship”
for the November 15 seizure. “The supertanker was fully loaded, so it
was probably low in the water and not that difficult to board,” he
said, adding that the pirates probably used a ladder or hooked a rope
to the side.

Pirates are well organised in the Horn of Africa, where Somalia’s
northeastern tip juts into the Indian Ocean. Somalia has had no
effective government since the 1991 overthrow of Mohamed Siad Barre,
the former president, touched off a bloody power struggle that has
defied numerous attempts to restore stability. This year, Somali
pirates have attacked 90 ships, more than double the number in 2007,
according to the International Maritime Bureau, and are still holding
16 ships and more than 250 sailors.

MOGADISHU, Somalia (AP) — Somalia’s increasingly brazen pirates are
building sprawling stone houses, cruising in luxury cars, marrying
beautiful women — even hiring caterers to prepare Western-style food
for their hostages. And in an impoverished country where every public
institution has crumbled, they have become heroes in the steamy
coastal dens they operate from because they are the only real business
in town. “The pirates depend on us, and we benefit from them,” said
Sahra Sheik Dahir, a shop owner in Harardhere, the nearest village to
where a hijacked Saudi Arabian supertanker carrying $100 million in
crude was anchored Wednesday.

These boomtowns are all the more shocking in light of Somalia’s
violence and poverty: Radical Islamists control most of the country’s
south, meting out lashings and stonings for accused criminals. There
has been no effective central government in nearly 20 years, plunging
this arid African country into chaos. Life expectancy is just 46
years; a quarter of children die before they reach 5. But in northern
coastal towns like Harardhere, Eyl and Bossaso, the pirate economy is
thriving thanks to the money pouring in from pirate ransoms that have
reached $30 million this year alone. “There are more shops and
business is booming because of the piracy,” said Sugule Dahir, who
runs a clothing shop in Eyl. “Internet cafes and telephone shops have
opened, and people are just happier than before.”

In Harardhere, residents came out in droves to celebrate as the
looming oil ship came into focus this week off the country’s lawless
coast. Businessmen gathered cigarettes, food and cold bottles of
orange soda, setting up kiosks for the pirates who come to shore to
resupply almost daily. Dahir said she even started a layaway plan for
them. “They always take things without paying and we put them into the
book of debts,” she told The Associated Press in a telephone
interview. “Later, when they get the ransom money, they pay us a lot.”
Residents make sure the pirates are well-stocked in khat, a popular
narcotic leaf, and aren’t afraid to gouge a bit when it comes to the
pirates’ deep pockets. “I can buy a packet of cigarettes for about $1
but I will charge the pirate $1.30,” said Abdulqadir Omar, an Eyl
resident. While pirate villages used to have houses made of corrugated
iron sheets, now, there are stately looking homes made of sturdy,
white stones. “Regardless of how the money is coming in, legally or
illegally, I can say it has started a life in our town,” said Shamso
Moalim, a 36-year-old mother of five in Harardhere. “Our children are
not worrying about food now, and they go to Islamic schools in the
morning and play soccer in the afternoon. They are happy.”

The attackers generally treat their hostages well in anticipation of a
big payday, hiring caterers on shore to cook spaghetti, grilled fish
and roasted meat that will appeal to Western palates. And when the
payday comes, the money sometimes literally falls from the sky.
Pirates say the ransom arrives in burlap sacks, sometimes dropped from
buzzing helicopters, or in waterproof suitcases loaded onto skiffs in
the roiling, shark-infested sea. “The oldest man on the ship always
takes the responsibility of collecting the money, because we see it as
very risky, and he gets some extra payment for his service later,”
Aden Yusuf, a pirate in Eyl, told AP over VHF radio.

The pirates use money-counting machines — the same technology seen
at foreign exchange bureaus worldwide — to ensure the cash is real. All
payments are done in cash because Somalia has no functioning banking
system. “Getting this equipment is easy for us, we have business
connections with people in Dubai, Nairobi, Djibouti and other areas,”
Yusuf said. “So we send them money and they send us what we want.”

Despite a beefed-up international presence, the pirates continue to
seize ships, moving further out to sea and demanding ever-larger
ransoms. The pirates operate mostly from the semiautonomous Puntland
region, where local lawmakers have been accused of helping them and
taking a cut of the ransoms. For the most part, however, the regional
officials say they have no power to stop piracy. Meanwhile, towns that
once were eroded by years of poverty and chaos are now bustling with
restaurants, Land Cruisers and Internet cafes. Residents also use
their gains to buy generators — allowing full days of electricity,
once an unimaginable luxury in Somalia.

PIRATES MAKE GOOD HUSBANDShttp://www.thenational.ae/article/20081021/OPINION/481690039/1006/rss “Pirate Jama Shino in the Somali town of Garowe, threw the most lavish
wedding party for his second marriage and invited hundreds of people
from the local authorities and among citizens,” Hussameddin wrote.
“The bride and the young women who attended the party, said: “Marrying
a pirate is every Somali girl’s dream. He has power, money, immunity,
the weapons to defend the tribe and funds to give to the militias in
civil war,” – from an op-ed in the Egyptian paper, Al Ahram.

“No information today. No comment,” a Somali pirate shouts over the
sound of breaking waves, before abruptly ending the satellite
telephone call. He sounds uptight – anxious to see if a multi-million
dollar ransom demand will be met. He is on board the hijacked
Ukrainian vessel, MV Faina – the ship laden with 33 Russian battle
tanks that has highlighted the problem of piracy off the Somali coast
since it was captured almost a month ago. But who are these modern-day
pirates? According to residents in the Somali region of Puntland where
most of the pirates come from, they live a lavish life.

Fashionable
“They have money; they have power and they are getting stronger by the
day,” says Abdi Farah Juha who lives in the regional capital, Garowe.
“They wed the most beautiful girls; they are building big houses; they
have new cars; new guns,” he says. “Piracy in many ways is socially
acceptable. They have become fashionable.” Most of them are aged
between 20 and 35 years – in it for the money. And the rewards they
receive are rich in a country where almost half the population need
food aid after 17 years of non-stop conflict.

Most vessels captured in the busy shipping lanes of the Gulf of Aden
fetch on average a ransom of $2m. This is why their hostages are well
looked after. The BBC’s reporter in Puntland, Ahmed Mohamed Ali, says
it also explains the tight operation the pirates run. They are never
seen fighting because the promise of money keeps them together.
Wounded pirates are seldom seen and our reporter says he has never
heard of residents along Puntland’s coast finding a body washed
ashore. Given Somalia’s history of clan warfare, this is quite a feat.
It probably explains why a report of a deadly shoot-out amongst the
pirates onboard the MV Faina was denied by the vessel’s hijackers.
Pirate spokesman Sugule Ali told the BBC Somali Service at the time:
“Everybody is happy. We were firing guns to celebrate Eid.”

Brains, muscle and geeks
The MV Faina was initially attacked by a gang of 62 men. BBC Somalia
analyst Mohamed Mohamed says such pirate gangs are usually made up
of three different types:
* Ex-fishermen, who are considered the brains of the operation
because they know the sea
* Ex-militiamen, who are considered the muscle – having fought for
various Somali clan warlords
* The technical experts, who are the computer geeks and know how
to operate the hi-tech equipment needed to operate as a pirate –
satellite phones, GPS and military hardware.

The three groups share the ever-increasing illicit profits – ransoms
paid in cash by the shipping companies. A report by UK think-tank
Chatham House says piracy off the coast of Somalia has cost up to $30m
(£17m) in ransoms so far this year. The study also notes that the
pirates are becoming more aggressive and assertive – something the
initial $22m ransom demanded for MV Faina proves. The asking price has
apparently since fallen to $8m.

Calling the shots
Yemen, across the Gulf of Aden, is reportedly where the pirates get
most of their weapons from. A significant number are also bought
directly from the Somali capital, Mogadishu. Observers say Mogadishu
weapon dealers receive deposits for orders via a “hawala” company – an
informal money transfer system based on honour. Militiamen then drive
the arms north to the pirates in Puntland, where they are paid the
balance on delivery. It has been reported in the past that wealthy
businessmen in Dubai were financing the pirates. But the BBC’s Somali
Service says these days it is the businessmen asking the pirates for
loans.

Such success is a great attraction for Puntland’s youngsters, who have
little hope of alternative careers in the war-torn country. Once a
pirate makes his fortune, he tends to take on a second and third wife
– often very young women from poor nomadic clans, who are renowned
for their beauty. But not everyone is smitten by Somalia’s new elite.
“This piracy has a negative impact on several aspects of our life in
Garowe,” resident Mohamed Hassan laments.

He cites an escalating lack of security because “hundreds of armed
men” are coming to join the pirates. They have made life more
expensive for ordinary people because they “pump huge amounts of US
dollars” into the local economy which results in fluctuations in the
exchange rate, he says. Their lifestyle also makes some unhappy. “They
promote the use of drugs – chewing khat [a stimulant which keeps one
alert] and smoking hashish – and alcohol,” Mr Hassan says.

The trappings of success may be new, but piracy has been a problem in
Somali waters for at least 10 years – when Somali fishermen began
losing their livelihoods. Their traditional fishing methods were no
match for the illegal trawlers that were raiding their waters. Piracy
initially started along Somalia’s southern coast but began shifting
north in 2007 – and as a result, the pirate gangs in the Gulf of Aden
are now multi-clan operations. But Garowe resident Abdulkadil Mohamed
says, they do not see themselves as pirates. “Illegal fishing is the
root cause of the piracy problem,” he says. “They call themselves
coastguards.”

“THEY ARE STRONGER THAN US”http://allafrica.com/stories/200808250109.html ‘Pirates Are Stronger Than Us’ – Eyl Mayor / 23 August 2008
“The mayor of a small coastal town in northeastern Somalia has
declared that local authorities are unable to stop pirates. Abdullahi
Said O’Yusuf, the mayor of Eyl in Puntland region, confirmed Radio
Garowe during a Saturday interview that four hijacked ships are being
held hostage near the town’s shores. “They are stronger than us,”
Mayor O’Yusuf said, while speaking of the pirates. He condemned
continued attacks on foreign ships traveling across the Indian Ocean,
while underlining that local authorities “cannot do anything” to stop
piracy. The Associated Press has reported that four ships – with
owners in Malaysia, Iran, Japan and Germany – and a total crew of 96
people are being held hostage by Somali pirates. Mayor O’Yusuf said
the pirates who hijacked the ships “are the same ones who received
ransom payments before,” referring to previous pirate attacks in the
region. According to the Mayor, pirates use ransom payments to “buy
houses in big cities” in different parts of the country.”

Whenever word comes out that pirates have taken yet another ship in
the Somali region of Puntland, extraordinary things start to happen.
There is a great rush to the port of Eyl, where most of the hijacked
vessels are kept by the well-armed pirate gangs. People put on ties
and smart clothes. They arrive in land cruisers with their laptops,
one saying he is the pirates’ accountant, another that he is their
chief negotiator.

With yet more foreign vessels seized off the coast of Somalia this
week, it could be said that hijackings in the region have become
epidemic. Insurance premiums for ships sailing through the busy Gulf
of Aden have increased tenfold over the past year because of the
pirates, most of whom come from the semi-autonomous region of
Puntland. In Eyl, there is a lot of money to be made, and everybody is
anxious for a cut.

Entire industry
The going rate for ransom payments is between $300,000 and $1.5m
(£168,000-£838,000). A recent visitor to the town explained how, even
though the number of pirates who actually take part in a hijacking is
relatively small, the whole modern industry of piracy involves many
more people. “The number of people who make the first attack is small,
normally from seven to 10,” he said. “They go out in powerful
speedboats armed with heavy weapons. But once they seize the ship,
about 50 pirates stay on board the vessel. And about 50 more wait on
shore in case anything goes wrong.”

Given all the other people involved in the piracy industry, including
those who feed the hostages, it has become a mainstay of the Puntland
economy. Eyl has become a town tailor-made for pirates – and their
hostages. Special restaurants have even been set up to prepare food
for the crews of the hijacked ships. As the pirates want ransom
payments, they try to look after their hostages. When commandos from
France freed two French sailors seized by pirates off the Somali coast
in September, President Nicolas Sarkozy said he had given the go-ahead
for the operation when it was clear the pirates were headed for Eyl –
it would have been too dangerous to try to free them from there.

The town is a safe-haven where very little is done to stop the pirates
– leading to the suggestion that some, at least, in the Puntland
administration and beyond have links with them. Many of them come
from the same clan – the Majarteen clan of the president of Somalia’s
transitional federal government, Abdullahi Yusuf.

Money to spend
The coastal region of Puntland is booming. Fancy houses are being
built, expensive cars are being bought – all of this in a country that
has not had a functioning central government for nearly 20 years.
Observers say pirates made about $30m from ransom payments last
year – far more than the annual budget of Puntland, which is about
$20m. When the president of Puntland, Adde Musa, was asked about
the reported wealth of pirates and their associates, he said: “It’s more
than true”.

Now that they are making so much money, these 21st Century pirates
can afford increasingly sophisticated weapons and speedboats. This
means that unless more is done to stop them, they will continue to
plunder the busy shipping lanes through the Gulf of Aden. They even
target ships carrying aid to feed their compatriots – up to a third of the
population. Warships from France, Canada and Malaysia, among others,
now patrol the Somali coast to try and fend off pirate attacks.

An official at the International Maritime Organisation explained how
the well-armed pirates are becoming increasingly bold. More than 30%
of the world’s oil is transported through the Gulf of Aden. “It is
only a matter of time before something horrible happens,” said the
official. “If the pirates strike a hole in the tanker, and there’s an
oil spill, there could be a huge environmental disaster”.

It is likely that piracy will continue to be a problem off the coast
of Somalia as long as the violence and chaos continues on land.
Conflict can be very good for certain types of business, and piracy is
certainly one of them. Weapons are easy to obtain and there is no
functioning authority to stop them, either on land or at sea.

“We want pre-emptive action against the mother ships before the
pirates carry out a hijacking,” said Captain Pottengal Mukundan,
director of the London-based International Maritime Bureau, which
monitors international piracy, referring to the ships pirates use as
bases from which to launch attacks. “The positions of the mother ships
are generally known. What we would like to see is the naval vessels
going to interdict them, searching them and removing any arms on
board. That would at least force the pirates to go back to Somalia to
pick up more arms before they could come back again,” he told Reuters
in an interview.

But the laws governing what navies can do to take on the pirates are
complex. Only if pirates are caught in the act of piracy — actually
boarding a ship and seizing it — can a naval ship intervene with the
full force of international law. Arriving 30 minutes after a vessel
has been boarded, when there is a degree of uncertainty over whether
those on board are pirates or not, is often too late, experts say.
Denmark recently had to return some suspected pirates to Somalia
because it couldn’t prove they were pirates after they were seized.

Mr. Mukundan said there were currently about four ‘mother ships’ —
seized dhows or other larger fishing boats anchored near international
waters — being used by pirates. The pirates live on the mother ships,
storing arms, fuel and other supplies on board, and then target ships,
which can include fuel tankers, by catching up to them in high-speed
boats and boarding them with rope ladders while heavily armed. Mr.
Mukundan acknowledged the legalities of taking on ‘mother ships’ were
tricky, but said it could be done if governments gave their naval
forces instructions to do it.”

“Piracy is an international crime consisting of illegal acts of
violence, detention, or depredation committed for private ends by the
crew or passengers of a private ship or aircraft in or over
international waters against another ship or aircraft or persons and
property on board. (Depredation is the act of plundering, robbing, or
pillaging.)

In international law piracy is a crime that can be committed only
on or over international waters (including the high seas, exclusive
economic zone, and the contiguous zone), in international airspace,
and in other places beyond the territorial jurisdiction of any nation.
The same acts committed in the internal waters, territorial sea,
archipelagic waters, or national airspace of a nation do not
constitute piracy in international law but are, instead, crimes within
the jurisdiction and sovereignty of the littoral nation.

Sea robbery is a term used to describe attacks upon commercial
vessels in ports and territorial waters. Such attacks are, according
to international law, not true acts of piracy but rather armed
robberies. They are criminal assaults on vessels and vessel crews,
just as may occur to truck drivers within a port area. Such attacks
pose a serious threat to trade. The methods of these attacks have
varied from direct force using heavy weapons to subterfuge in which
the criminals have identified themselves on VHF radio as the national
coast guard.

These maritime criminals are inclined to operate in waters where
government presence is weak, often lacking in both technical resources
and the political will to deal effectively with such attacks.
International law permits any warship or government vessel to repress
an attack in international waters. In a state’s territorial waters,
such attacks constitute an act of armed robbery and must be dealt with
under the laws of the relevant coastal state. These laws seldom, if
ever, permit a vessel or warship from another country to intervene.
The most effective countermeasure strategy is to prevent criminals
initial access to ports and vessels, and to demonstrate a consistent
ability to respond rapidly and effectively to notification of such a
security breach.

Acts of piracy can only be committed by private ships or private
aircraft. A warship or other public vessel or a military or other
state aircraft cannot be treated as a pirate unless it is taken over
and operated by pirates or unless the crew mutinies and employs it for
piratical purposes. By committing an act of piracy, the pirate ship or
aircraft, and the pirates themselves, lose the protection of the
nation whose flag they are otherwise entitled to fly.

To constitute the crime of piracy, the illegal acts must be
committed for private ends. Consequently, an attack upon a merchant
ship at sea for the purpose of achieving some criminal end, e.g.,
robbery, is an act of piracy as that term is currently defined in
international law. Conversely, acts otherwise constituting piracy done
for purely political motives, as in the case of insurgents not
recognized as belligerents, are not piratical.

International law has long recognized a general duty of all
nations to cooperate in the repression of piracy. This traditional
obligation is included in the 1958 Geneva Convention on the High Seas
and the 1982 LOS Convention, both of which provide: “[A]ll States
shall cooperate to the fullest possible extent in the repression of
piracy on the high seas or in any other place outside the jurisdiction
of any State.””

The seizure Monday of a supertanker carrying $100 million of crude oil
off the coast of Somalia is one of many ship hijackings by pirates of
late. A cargo ship flying a Hong Kong flag also was taken over in the
Gulf of Aden on Tuesday — the seventh hijacking in the area in 12
days, according to The Associated Press. The magnitude of recent
piracy attacks is rising, and an interactive map maintained by the
International Chamber of Commerce shows where these attacks are
taking place. Many are focused around the eastern Horn of Africa, but
piracy in the waters around Indonesia also has been frequent. J. Peter
Pham, director of the Nelson Institute for International and Public
Affairs at James Madison University, says the recent spikes in piracy are
“a crime of both opportunity and expediency.”

“Somalia has lacked a government, effectively, since 1991 and the
current interim government — the 14th of its kind in a decade and a
half — is tottering on its last legs, so there is very little control
to prevent lawlessness,” he says. “There is also the fact that
increasingly commerce is moving in this direction — the demand for oil
and other resources. Roughly 11 percent of the world’s petroleum flows
through these waters.” For Somalis, Pham says, “this is really the
best thing they have going for them economically. Piracy and ransom
this year will exceed more than $50 million — it’s Somalia’s largest
income-earner.

“The ship owners and insurers have found that it’s more cost-effective
to pay ransoms. They are currently averaging slightly over $1 million
per vessel, and that’s cheaper than buying a new ship,” Pham says.
“The Saudi tanker that was seized [Monday] was just launched six
months ago and cost $150 million to build and the cargo on board is
worth $100 million, so I suspect the ship owners will be willing to
pay some fraction of that to get it back.” Pham says that most tankers
of that size are not armed, or if they are, they have small side arms.
The pirates come in fast speed boats, circle the vessel and threaten
to blow it out of the water with rocket-propelled grenades or shoulder-
launched missiles. “Faced with that prospect, most captains — to save
the life of their crew and save the vessels — will surrender control
of the vessel to the pirates,” Pham says.

Tipped off by friends in ports from Odessa to Mombasa, Somali pirates
captured a Ukrainian freighter, the MV Faina, in the Gulf of Aden and
steered it to Somalia’s coast. At first they demanded $20m for the
release of ship and crew. The captain died, apparently of
“hypertension”, and several pirates may have then killed each other
after a quarrel. This recent incident was only the latest in a long
list of similar outrages and highlights the growing menace caused by
the total failure of the state of Somalia, the ultimate cause of the
virus of piracy in the region.

The ship was carrying 33 T-72 Russian tanks, anti-aircraft guns and
grenade launchers. Lighter weapons may have been offloaded on the
Somali shore before an American warship arrived on the scene. Kenya
claimed ownership of the cargo but the manifest suggests its
destination was south Sudan, with Kenya’s co- operation in its
delivery to be rewarded in the future with cheap south Sudanese oil.
At midweek, a Russian warship was steaming to the scene to take
responsibility for its citizens on the ship.

The attack was only one of at least 60 off Somalia this year. Foreign
navies can intercept vessels captured by pirates, but the desolation
and length of Somalia’s coastline give them little chance of stamping
out piracy without much larger and better co-ordinated forces. In
cahoots with gangs in Yemen, Somali pirates look set to go on hitting
vessels heading into or out of the Red Sea or passing through the Gulf
of Aden: about 10% of the world’s shipping.

It is big business. The pirates are increasingly sophisticated,
handsomely bankrolled by Somalis in Dubai and elsewhere. They are not
yet directly tied up with the Islamist insurgents in Somalia, though
they may yet have to pay cash to whoever controls their coastal havens
in return for uninterrupted business, thus assisting the purchase of
weapons and fuelling the violence. The nabbed ships are mostly
anchored off the village of Eyl in Puntland in the north-east or the
pirate town of Haradheere farther south (see map) until a ransom is
paid, which is usually within a month of capture. The average ransom
has tripled since 2007, as has the number of ships taken. Some $100m
may have been paid to pirates this year. By comparison, the United
Nations Development Programme’s annual budget for Somalia is $14m.

Piracy is a symptom of the power vacuum inside Somalia. The country’s
“transitional federal government”, headed by a warlord president,
Abdullahi Yusuf, and a bookish prime minister, Nur Hussein, is
powerless to stop its citizens raising the Jolly Roger, just as it
cannot halt the resurgent jihadists, some with al-Qaeda connections,
who have taken control of much of southern Somalia, including the port
town of Kismayo. Hundreds of thousands have fled street fighting in
the north of Mogadishu to camps outside the city; some head south to
refugee camps in Kenya. About 9,000 civilians have been killed in the
insurgency in the past year, according to human-rights groups.

The UN’s envoy to Somalia, Ahmedou Ould Abdullah, a former foreign
minister of Mauritania, is overseeing peace talks in nearby Djibouti
between the transitional government and the moderate wing of the
Alliance for the Reliberation of Somalia (ARS), an Islamist group
headed by a former teacher, Sharif Ahmed. The aim is to create a
genuine government of national unity before elections next year.

A condition of any agreement is the withdrawal of the 7,000-odd
Ethiopian troops now in Somalia. Mr Ould Abdullah wants to replace
them and a separate 2,200-strong African Union force of Ugandan and
Burundian troops with 8,000 UN peacekeepers. Ethiopia, which is losing
men and money, would be happy with that, if the peacekeepers were
somehow shoehorned in without the jihadists taking advantage of a
hiatus. America agrees, but only if the deployment of blue helmets is
matched by an effort to build a new Somali national army. Mr Ould
Abdullah is also keen for the International Criminal Court in The
Hague to indict some of the worst warlords, to show they cannot murder
their opponents with impunity. But it is unlikely, in present
circumstances, that UN peacekeepers will ever arrive. If the UN cannot
produce half its promised force for Darfur, despite a detailed plan
for one, Somalia stands little chance of getting any blue helmets at
all.

Feuding among Somali leaders makes matters worse. “Somalia is a victim
of its political, business and military elite,” says Mr Ould Abdullah.
“They’ve taken the country hostage.” A slender hope, backed by Britain
and some other EU countries, is that ordinary Somalis will eventually
force their leaders to put national interest above self-interest and
sign the proposed agreement in Djibouti. In any event, says another
diplomat, “There is no Plan B.”

As the peace talks limp on, the insurgency is getting stronger. It is
led by the Shabab (Youth), the armed wing of the Islamic Courts Union,
which ran Somalia with some success for a few months in 2006 until it
was smashed, at the end of that year, by the invading Ethiopians, with
American backing. The Shabab has since reconstituted itself, making
ground with tactics copied from Iraq: roadside bombings, the kidnap
and murder of foreigners, local aid-workers and peace campaigners, and
grenade attacks on video shacks showing films or football.

My enemy’s enemy is my friend
Its fighters come under the leadership of a wily red-bearded 70-year-
old jihadist, Hassan Dahir Aweys, and a former deputy commander of the
Islamic Courts, Mukhtar Robow. They are backed by Eritrea, which has
offered sanctuary to the radical rump of the ARS in its capital,
Asmara. Eritrea’s interest is not to help Somalia but to hurt its
bitter enemy, Ethiopia. The Shabab is also backed by fighters from the
Hawiye clan and by hungry young freelance gunmen who represent
Somalia’s huge lost generation. Half the population, 10m-odd before
the exodus, was born after Siad Barre’s regime fell in 1991. Since
then, it is guessed, only 10% have had even rudimentary education;
health care barely exists.

Few foreign governments have shown much interest in trying to end
Somalia’s woes. Diplomats charged with trying to do so are frustrated
and depressed. Meanwhile the suffering is mounting. The UN reckons
3.2m Somalis now survive on food aid. The piracy means that warships
have to escort ships bringing food. If fighting intensifies, that will
be harder—and manipulating food aid could become a weapon, as it was
during fighting in 1991 and 1992, when 300,000 Somalis starved to
death.

…as I now read Richard Dowden’s Africa: Altered States, Ordinary
Miracles, the political outline is becoming clear: one man rule from
1969-1991; then civil war; a failed American rescue attempt; and then
no government; and more recently, Ethiopia meddling in its affairs.
The excerpts I’ll present here, though, are images of a modernizing
Somalia, of how in the absence of a government, a free market thrived
in the 90s and filled the void.

“In 1999 I went back to Somalia to see what had happened.
Considering there was no state and civil war sputtered on, life was
not as bad as I had expected. In some ways it was a lot better. Those
few aid agencies that stayed on were no longer run by expatriate
overlords but staffed by Somalis. Not many foreign aid workers wanted
to be there. Somalis had also managed to get the economy going –
without a single cent from the World Bank or IMF. The new economy was
largely built around a worldwide telephone banking system – a truly
free market system and , at the time, by far the world’s cheapest and
most efficient. Several Somalis who had worked in telecoms in America
bought dishes and telephone equipment and set up phone booths in small
towns. From here, for a dollar a minute, people could call cousins and
aunts and uncles all over the world.”

And how the cell phone is the perfect device for the wandering Somali
herder wanting to learn market prices:

“Somali herders move around in a yearly pattern. In the dry
season, towards the end of the year, they go down to the coast as they
have done for centuries to sell some of their animals to traders who
take them across the Red Sea to the markets of Saudi Arabia. I have
watched them at the port of Berbera, herds of camels and sheep driven
to holding areas where herders have to buy fodder for them and pay for
water at the trough markets. These herdsmen are at a big disadvantage
while they wait to sell their animals. But the mobile phone has
rescued them. They can call up traders in Jeddah directly to find out
the market price of animals there. They now know when to come down
out of the mountains and sell. A week later I watch a herdsman on the
outskirts of Berbera driving his herd towards the port with herding
stick in one hand and in the other a mobile phone – perfect technology
for the nomad.”’

Rising from the ruins of the Mogadishu skyline are signs of one of
Somalia’s few success stories in the anarchy of recent years. A host
of mobile phone masts testifies to the telecommunications revolution
which has taken place despite the absence of any functioning national
government since 1991. Three phone companies are engaged in fierce
competition for both mobile and landline customers, while new internet
cafes are being set up across the city and the entire country. It
takes just three days for a landline to be installed – compared with
waiting-lists of many years in neighbouring Kenya, where there is a
stable, democratic government. And once installed, local calls are
free for a monthly fee of just $10. International calls cost 50 US
cents a minute, while surfing the web is charged at 50 US cents an
hour – “the cheapest rate in Africa” according to the manager of one
internet cafe. But how do you establish a phone company in a country
where there is no government?

No monopoly
In some respects, it is actually easier. There is no need to get a
licence and there is no state-run monopoly which prevents new
competitors being established. And of course there is no-one to demand
any taxes, which is one reason why prices are so low. “The government
post and telecoms company used to have a monopoly but after the
regime was toppled, we were free to set up our own business,” says
Abdullahi Mohammed Hussein, products and services manager of
Telcom Somalia, which was set up in 1994 when Mogadishu was still
a war-zone. “We saw a huge gap in the market, as all previous services
had been destroyed. There was a massive demand.” The main airport
and port were destroyed in the fighting but businessmen have built
small airstrips and use natural harbours, so the phone companies are
still able to import their equipment. Despite the absence of law and
order and a functional court system, bills are paid and contracts are
enforced by relying on Somalia’s traditional clan system, Mr Abdullahi
says.

Mobile target
But in a country divided into hundreds of fiefdoms run by rival
warlords, security is a major concern. While Telcom Somalia has some
25,000 mobile customers – and a similar number have land lines – you
very rarely see anyone walking along the streets of Mogadishu chatting
on their phone, in case this attracts the attention of a hungry
gunman. The phone companies themselves say they are not targeted by
the militiamen, even if thieves occasionally steal some of their
wires. Mahdi Mohammed Elmi has been managing the Wireless African
Broadband Telecoms internet cafe in the heart of Mogadishu, surrounded
by the bustling and chaotic Bakara market, for almost two years. “I
have never had a problem with security,” he says and points out that
they have just a single security guard at the front door. Mr Abdullahi
says the warlords realise that if they cause trouble for the phone
companies, the phones will stop working again, which nobody wants. “We
need good relations with all the faction leaders. We don’t interfere
with them and they don’t interfere with us. They want political power
and we leave them alone,” he says.

Selling goats on the net
While the three phone companies – Telcom, Nationlink and Hormuud – are
engaged in bitter competition for phone customers, they have co-
operated to set up the Global Internet Company to provide the internet
infrastructure. Manager Abdulkadir Hassan Ahmed says that within 1.5km
of central Mogadishu, customers – mostly internet cafes – can enjoy
service at 150Mb/second through a Long Reach Ethernet. Elsewhere, they
can have a wireless connection at 11Mb/s. He says his company is able
to work anywhere in Somalia, whichever faction is in charge locally.
“Even small, remote villages are connected to the internet, as long as
they have a phone line,” he says. The internet sector in Somalia has
two main advantages over many of its Africa neighbours. There is a
huge diaspora around the world – between one and three million people,
compared with an estimated seven million people in Somalia – who
remain in contact with their friends and relatives back home. E-mail
is the cheapest way of staying in touch and many Somalis can read and
write their own language, instead of relying on English or French,
which restricts internet users to a smaller number of well educated
people. Just two days after it was opened, the Orbit internet cafe in
south Mogadishu’s km5 was already pretty busy, with people checking
their e-mail accounts, a livestock exporter sending out his invoices
and two nurses doing medical research.

Video calling
And Somalia’s telecoms revolution is far from over. “We are planning
to introduce 3G technology, including live video calling and mobile
internet, next year,” says Mr Abdullahi. But despite their success,
the telecoms companies say that like the population at large, they are
desperate to have a government. “We are very interested in paying
taxes,” says Mr Abdullahi – not a sentiment which often passes the
lips of a high-flying businessman. And Mr Abdulkadir at the Global
Internet Company fully agrees. “We badly need a government,” he says.
“Everything starts with security – the situation across the country.
“All the infrastructure of the country has collapsed – education,
health and roads. We need to send our staff abroad for any training.”
Another problem for companies engaged in the global telecoms business
is paying their foreign partners. At present, they use Somalia’s
traditional “Hawala” money transfer companies to get money to Dubai,
the Middle East’s trading and financial hub. With a government would
come a central bank, which would make such transactions far easier.
Taxes would mean higher prices but Mr Abdullahi says that Somalia’s
previous governments have kept taxes low and hopes this will continue
under the regime due to start work in the coming months. Somalia’s
telecoms companies are looking forward to an even brighter future with
the support of a functioning government – as long as it does not
impose punitive tax rates or state control in a sector which obviously
needs very little help to thrive.

The headquarters of Telecom Somalia is filled with the sights and
sounds of Mogadishu-style success. Customers pour through the
entrance, funneling past machine-gun positions that flank the front
doors. After a pat-down by security guards, who take temporary
possession of any guns and knives, they enter the lobby and line up at
the appropriate counters to pay their bills or order new service.
Clocks on a wall display the time in New York, Paris, London, Sydney,
and Karachi—reminders of an outside world that has pretty much left
Somalia for dead. Computer keyboards clatter as workers punch in
information. Customers chat and argue with one another in a gregarious
manner that makes the lobby feel like a town square—all the more so if
a goat that’s being herded down the street happens to stray inside.

Telecom Somalia is the largest company in Mogadishu. It has 700
employees, and it offers some of the best and cheapest phone service
in Africa. It also provides a clue to the possible resuscitation of
the world’s most famous failed state. In 1995, when the international
community decided to wash its hands of Somalia and the last United
Nations peacekeepers left the country, Mogadishu was a Hobbesian
horror show. It remains a miserable and unstable place, a city where
taxi drivers ruin their own vehicles, denting the body work and
smashing the windows, so that thieves will not bother to steal them.
But it is less dismal than it used to be, and better times may be on
the way, owing to a new generation of businessmen who are determined
to bring the lawless capital back to life.

Prime among the city’s entrepreneurial leaders is Abdulaziz Sheikh,
the chief executive of Telecom Somalia. When I visited him last
summer, in a small office on the fourth floor of the company’s
headquarters, he was being blasted by a hurricane-force air-
conditioner that nearly drowned out the constantly ringing phones on
his desk. “You need to be here twenty-four hours a day,” he said,
explaining that he lives as well as works on the premises. Sheikh had
the running-on-fumes look of a campaign chairman in a never-ending
race, but at least he appeared to be winning. Anyone can walk into the
lobby of his building, plunk down a $100 deposit, and leave with a
late-model Nokia that works throughout the city, in valleys as well as
on hilltops, at all hours. Caller ID, call waiting, conference
calling, and call forwarding are available. There are two other
cellular-phone firms in town, and the three recently entered into a
joint venture and created the first local Internet-service provider.
Not all battles here are resolved by murder.

Mogadishu also has new radio and television stations (one night I
watched the Somali equivalent of Larry King Live, in which the
moderator and his guest, one of the city’s leading Islamic clerics,
fielded questions from callers), along with computer schools and an
airport that serves several airlines (although these fly the sorts of
airplanes that Americans see only in museums). The city’s Bekara
market offers everything from toilet paper, Maalox, and Colgate
toothpaste to Viagra, sarongs, blank passports (stolen from the
Foreign Ministry a decade ago), and assault rifles. The international
delivery company DHL has an office in Mogadishu, where its methods can
be unorthodox: if a client has an urgent package that cannot wait for
a scheduled flight out of the country, the company will dispatch it on
one of the many planes that arrive illegally from Kenya every day
bearing khat, a narcotic leaf that is chewed like tobacco but has the
effect of cocaine.

Mogadishu has the closest thing to an Ayn Rand-style economy that the
world has ever seen—no bureaucracy or regulation at all. The city has
had no government since 1991, when the much despised President
Mohammed Siad Barre was overthrown; his regime was replaced not by
another one but by civil war. The northern regions of Somaliland and
Puntland have stabilized under autonomous governments, but southern
Somalia, with Mogadishu at its core, has remained a Mad Max zone
carved up by warlords for whom fighting seems as necessary as oxygen.
The prospect of stability is a curious miracle, not simply because the
kind of business development that is happening tends to require the
presence of a government, but because the very absence of a
government may have helped to nurture an African oddity—a lean
and efficient business sector that does not feed at a public trough
controlled by corrupt officials.

Similarly, the lack of large-scale (and often corrupting) foreign aid
might have benefits as well as drawbacks. Somali investors are making
things happen, not waiting for them to happen. For example, on the
outskirts of town, on a plot of land the size of several football
fields and surrounded by twenty-foot-high walls, workers recently
completed a $2 million bottling plant. Everyone refers to it as “the
Pepsi factory,” even though Pepsi is not involved. The project’s
investors say the plant will become a Pepsi factory: they figure that
if they begin producing soft drinks, Pepsi or some other international
company will want to get in on the market.

Many of the larger companies in Mogadishu, including the bottling
plant, have issued shares, although there is of course no stock
exchange or financial authority of any sort in the city. Everything is
based on trust, and so far it has worked, owing to Somalia’s tightly
woven clan networks: everyone knows everyone else, so it’s less likely
that an unknown con man will pull off a scam. In view of Somalia’s
history, this ad hoc stock market is not as implausible as it may
sound. Until a century ago, when Italy and Britain divided what is
present-day Somalia into colonial fiefdoms, Somalis got along quite
well without a state, relying on systems that still exist: informal
codes of honor and a means of resolving disputes, even violent ones,
through mediation by clan elders.

Of course, the lack of a government poses problems, especially with
respect to the warlords. Sheikh and his fellow businessmen have kept
them at bay by paying them protection money and by forming their own
militias. Those manning the machine guns outside Telecom Somalia are
employees of the company, and when the firm’s linemen go out to lay
new cables (they used to string overhead lines, but those got shot up
by stray gunfire), they, too, are protected by company gunmen. All of
this is costly, so the business leaders have taken steps to bring
about a new government—one that will keep its hands out of their
pockets and focus on providing security and public services. The
process began two years ago, when Sheikh and other entrepreneurs got
fed up with the blight of checkpoints, at which everyone was required
to pay small tributes to armed teenagers affiliated with various
warlords. The businessmen decided collectively to fund a militia to
get rid of the checkpoints, resulting in an armed force that is
overseen by the city’s Islamic clerics. Having succeeded in its main
mission, the militia now serves as an informal sort of police force,
patrolling the streets in an effort to stop petty crime.

With the checkpoints gone and the warlords weakened by the loss of a
key source of income, the business elite is bankrolling a transitional
government that was appointed at a peace conference last August. The
government does not yet control much more than the heavily guarded
buildings that are its temporary headquarters, but it has begun
deploying its own policemen in some parts of the city. The businessmen
are pooling their company security forces to bolster the government
and are trying to lure the warlords’ gunmen to its side with cash
incentives. In February one of the leading warlords, Mohamed Qanyareh,
agreed to support the government in exchange for ministerial posts for
himself and his allies.

If the business community succeeds in returning Mogadishu to something
resembling normalcy, it will have shown that a failed state, or at
least its capital city, can get back on its feet without much help
from the outside world. This would constitute not an argument against
outside intervention but, rather, a lesson that intervention doesn’t
have to be of the UN-led, billion-dollar variety. Before leaving the
city I met with Hussein Abdullahi, a well-educated businessman who
fled Mogadishu in 1991 and wound up in Toronto, driving a taxi. Three
years ago, during a return visit, he was struck by the fact that his
Somali friends were living better at home than he was in Canada, at
the bottom of the immigrant ladder. He decided to move back and now
manages a thriving pasta factory, a bread factory, and a medical
clinic. Sipping an ice-cold Coke in his office, Abdullahi offered to
share a secret that, he promised, could make me rich. A chubby man
with a beatific smile, he leaned forward conspiratorially. “Everything
is possible in Mogadishu now, everything,” he said. “If you have the
money and the knowledge, you can do whatever you want. It is virgin
here.” Perhaps so, but only in the way of scorched earth.

Telecommunications: networks link up
Many local companies have teamed up with international giants such as
Sprint (U.S.) and Telenor (Norway), providing mobile phones and
building new landlines. Vigorous competition has pushed prices well
below typical levels in Africa, and Somalia now has 112,000 fixed
lines and 50,000 mobile subscribers, up from 17,000 lines before 1991.
Yet not all is well. Calling every phone subscriber in Hargeisa, in
the Northwest, would require connections from four telephone firms.
But firms in Mogadishu have now agreed on interconnection standards,
and those in Hargeisa appear to be following suit. The negotiations
were brokered by the Somali Telecom Association, set up with the help
of the United Nations and International Telecommunication Union (ITU)
and head-quartered in Dubai.[1]

Electricity: simple solutions yield results
Entrepreneurs have worked around Somalia’s lack of a functioning
electricity grid, payment systems, and metering. They have divided
cities into manageable quarters and provide electricity locally using
secondhand generators bought in Dubai. They offer households a menu of
choices (daytime, evening, or 24-hour service) and charge per
lightbulb.

Water: access but not cheap or safe
Public water provision is limited to urban areas, but a private system
extends to all parts of the country as entrepreneurs build cement
catchments, drill private boreholes, or ship water from public systems
in the cities. Prices naturally rise in times of drought.
Traditionally, destitute families have not had to pay for water, while
the slightly better-off borrow funds from relatives. Nevertheless,
after several years of drought the United Nations estimates that many
families in the Eastern Sanaag have debts of US$50–100 for water.
Moreover, access to safe water is low even by African standards
because neither regulators nor the market have been able to persuade
merchants to purify their water.

Air travel: outsourcing safety
In 1989 the national carrier (partly owned by Alitalia) operated just
one airplane and one international route.[2] Today the sector boasts
about 15 firms, more than 60 aircraft, 6 international destinations,
more domestic routes, and many more flights. But safety is a concern.
Airports lack trained air traffic controllers, fire services, runway
lights, and a sealed perimeter against stray animals, and checks on
aircraft and crew are inadequate. The makeshift solution:
international outsourcing. Somali carriers lease planes, often with
crews from Eastern Europe (the largest, Daallo Airlines, leases a
Boeing from the United Kingdom, to boost customer confidence). And
they operate out of Djibouti, Dubai, and Nairobi, using the facilities
there to check aircraft safety.

Private courts: quick but limited
A recent effort to endow Mogadishu with a functioning court collapsed
when the court tried to levy taxes and take over the privately run
port of El Ma’an. In any case Somalia lacks contract law, company law,
the concept of limited liability, and other key pillars of commercial
law. In some cases Somalis have used offshore registration of
businesses to import legal concepts and services. More commonly,
disputes are settled at the clan level, by traditional systems run by
elders and with the clan collecting damages. Such measures are free—
and fast by international standards. In a case involving the
oppression of minority shareholders in a large livestock company, out-
of-court talks were preferred, the company continued to operate
successfully, and the dispute was settled amicably. But clan-based
systems deal poorly with disputes outside the clan. In a dispute
involving the telecommunications company Aerolite, the interclan
committee of elders awarded the plaintiff from a weaker clan an
unfairly small settlement, and since it was not enforced, he received
nothing.

Currency: perfect competition for dollars [2001]
Sharp inflation in 1994–96 and 2000–01 destroyed confidence in three
local currencies. U.S. dollars are harder to forge, do not need to be
carried around in large fragile bundles, and, most important, retain
their value. The feeble capabilities of the central bank have allowed
free entry into the currency exchange business, which is as close to
perfectly competitive as is ever likely to be possible.

International fund transfers: hawala system
The hawala system, a trust-based money transfer system used in many
Muslim countries, moves US$0.5–1 billion into Somalia every year. A
person in New York wishing to send money to his family in Tog-waajale
gives the hawala agent in New York the sum in cash, paying a 5 percent
commission. The agent deposits the cash in a local bank account to be
transferred to the company bank account in Djibouti or Dubai, then
alerts the clearinghouse in Hargeisa, which passes details on to Tog-
waajale. When the recipient shows up, the local agent quizzes him
about his clan lineage using questions provided by the relative
overseas as security against fraud. The transaction is usually
completed within 24 hours. Hawala networks are unregulated and do not
always keep records of transactions, but they are coming under
pressure from efforts to combat money laundering.[3]

Savings accounts and traveler’s checks
Somalia has adopted the widespread African institution of rotating
credit associations, which rely on clan links for enforcement and
provide a safe haven for savings. More innovative is the system of
traveler’s checks for the pilgrimage to Mecca, or hajj. Nobody would
accept Somali checks, so Somali firms set up accounts in Saudi banks
and write checks to pilgrims that can be cashed in any branch.

Gaps in private sector provision
In some areas the private sector has made little progress. The Somali
road system, for example, is limited and in poor condition. For a
private supplier to build a road and collect fees to cover the costs
is apparently too hard, partly because of prohibitive transaction
costs and partly because fee-paying users are not the only ones who
benefit from roads. Primary education is another disappointing story.
Some 71 percent of primary schools are privately owned (typically by
parents or communities), but enrollment is just 17 percent. By
contrast, it is 82 percent in West Africa, where countries are richer
and more stable and the government is much more heavily involved in
the economy. Ideally, benevolent government would sort out both
problems. But government that is merely stronger might not help. Where
municipal governments along the Berbera–Hargeisa road have the power
to collect tolls, they do not spend them on maintenance. The failings
of the education system are partly because half of Somalis are nomads.
It is not clear that government would do much better, especially since
the private schools are locally acknowledged to be superior to those
run by local government. Rather than try to create a government system
from scratch, a better policy would be to improve the network of
higher-quality private schools.

Conclusion
The achievements of the Somali private sector form a surprisingly long
list. Where the private sector has failed—the list is long here too—
there is a clear role for government interventions. But most such
interventions appear to be failing. Government schools are of lower
quality than private schools. Subsidized power is being supplied not
to the rural areas that need it but to urban areas, hurting a well-
functioning private industry. Road tolls are not spent on roads.
Judges seem more interested in grabbing power than in developing laws
and courts. A more productive role for government would be to build on
the strengths of the private sector. Given Somali reliance on clan and
reputation, any measures allowing these mechanisms to function more
broadly would be welcome; credit and land registries would be a good
start. And since Somali businesses rely heavily on institutions
outside the economy, international and domestic policies supporting
such connections would help. For governments and aid agencies, the
capability of some business sectors to cope under the most difficult
conditions should give hope and guidance in other reconstruction
efforts. It may take less encouragement than is commonly thought for
stripped-down systems of finance, electricity, and telecommunications
to grow.

Somalia’s economy is dominated by trade in khat, a narcotic banned in the U.S. and much of Europe. Eye-popping, head-buzzing khat is loved by Somali men who chew the leaves for their stimulant effect. While most of war-torn Somalia’s economy is moribund, khat does a bustling trade estimated at well over $50 million annually. Doctors warn, however, that the drug is not only a drain on limited Somali resources but is also destroying lives.

Hargeisa is the capital of Somaliland, the northern territory nominally independent from Somalia which maintains peace and economic activity, especially the khat trade. Lounging on a rug on the second floor of an ostentatious glass and stone mansion overlooking Hargeisa, Mohamed Yusuf Moge, aptly known as “The Fat Mohamed,” lit up another cigarette. In front of him was a pile of leafless khat twigs. His eyes were wide and red-rimmed, a symptom of the leaves that have been chewed. “We bring in 80-tons of khat every day,” he said. “We have many vehicles and two airplanes for transporting our produce. We control the market: We are the De Beers of the khat industry!”

“We” is “571 Allah Amin,” a family business started 15 years ago that has grown to become Somaliland’s biggest khat importer. Moge is 571’s country rep. Although he would not reveal how much the company makes, it is estimated that its revenue is $320,000 a day. Downtown at the company depot, the second of the day’s trucks arrives from the highland farms of neighboring Ethiopia mid-morning. Thursday is the busiest day of the week because, as one man explained, Friday is the Muslim day of rest so everyone can sleep off their khat hangover.

As the khat truck pulled in, barrow boys and vendors crowded round the tailgate to unload the 70 kg sacks of khat wrapped in hay to keep it fresh. Inside are small bundles of shoots that are bought wholesale for $1 and sold retail for $1.50. “Business is good!” shouted Omar Hersi Warfa, 571’s depot manager, over the clamor. “We are working hard and people are chewing!” Khat vendor Shamis Abdullahi Nur, 50, squatting on the ground nearby, agreed. “Business is very good because of our security and peace,” she said as she directed a sack of khat to be loaded into the back of a beat-up station wagon for the drive across town to her stall. Others pushed smaller consignments away in wheelbarrows. “I’ve been selling khat for over 30 years and now is the best time. There was a time of war, a time when I was a refugee, but now you can see I am sitting here eating my mango,” she said with a sticky, happy smile

Street prices are highest in the early afternoon because this is gayiil time when most men chew the khat and shoot the breeze. They can be found sitting on carpets in shady spots close to khat kiosks, with an ashtray, a flask of sweet tea and a jug of water at their feet. Women often sell khat but are not invited to chew. But increasingly men are also chewing in the morning, the evening and throughout the night. The stoned man in a cotton wrap tottering in a daze along a crumbling potholed road with a fistful of green stems is a common sight. Some warn the national habit does psychological damage. In the mental wing of Hargeisa’s main hospital, a staff member walked past the patients, many of whom were chained to a bed or a post or sat staring vacantly on the floor. “The majority of the men here are affected by chewing khat, most are schizophrenic,” said Faisal Ibrahim.

Dr. Yassin Arab Abdi, the hospital’s chief doctor, said: “Chewing is part of it although there are many reasons for mental illness. Before they used to chew at a certain time for a few hours now there are four sessions 24-hours a day. These people are addicts.” Back at the khat mansion, “Fat Mohamed” Moge and his colleagues, however, extolled the virtues of the drug. “Khat plays a great role in our society. If there’s conflict people have to sit down, chew, talk about it,” Moge said. “It is not like a drug which destroys the mind. It is a stimulant. If you chew khat in the right manner it doesn’t affect you.” But, he admitted, “There are some guys who are addicted, this is because they are jobless and have nothing to do.”

Unfortunately this description applies to many Somali men. The last national government — a military dictatorship — collapsed in 1991. Since then the unrecognized state of Somaliland has declared itself independent while Somalia has descended deeper into war and chaos. Isolation on the one hand and war on the other have left the formal economy shattered with many surviving on remittances sent from relatives abroad. Yet it is not unusual for men to spend $5 or $10 a day on khat, making the habit a huge drain on very limited resources. The government’s entire annual budget is less than $50 million, around $14 a head for each of Somaliland’s 3.5 million citizens. Such is the love of khat that to outlaw it would be political suicide. Nevertheless a senior Somaliland politician, Musa Behe of the opposition Kulmiye party, said, “The Somali man works less because he chews khat. We won’t ban it but we need to raise awareness of the harm khat does.”

Somalia has been without an effective central government since
President Siad Barre was overthrown in 1991. The self-proclaimed state
of Somaliland and the region of Puntland run their own affairs.
* Population: 8.7 million (UN, 2007)
* Capital: Mogadishu
* Area: 637,657sq km (246,201 sq miles)
* Major languages: Somali, Arabic, Italian, English
* Major religion: Islam
* Life expectancy: 47 years (men), 49 years (women)
* Monetary unit: 1 Somali shilling = 100 cents
* Main exports: Livestock, bananas, hides, fish
* GNI per capita: n/a

President: Abdullahi Yusuf Ahmed
Abdullahi Yusuf Ahmed, a former leader of the semi-autonomous Somali
region of Puntland, was chosen by Somalia’s interim parliament as
president of the Transitional Federal Government in October 2004. The
election took place in Kenya because the Somali capital was regarded
as being too dangerous. A former army officer and faction leader, Mr
Yusuf led a guerrilla movement in the 1970s aimed at ousting the
Somali dictator Siad Barre. In the 1990s he emerged as the pre-eminent
leader of his native Puntland region; he declared the territory
autonomous in 1998. He is said to have an authoritarian approach to
leadership.

Somalia’s disintegration is reflected in its media, which is
undeveloped, fragmented and often partisan. Broadcasters and
journalists operate in an atmosphere which is hostile to free
expression, and often dangerous. In spite of this, diverse and more
professional media outlets have emerged in recent years – in
particular, FM radio stations with no explicit factional links. The TV
and press sectors are weak and radio is the dominant medium. There are
around 20 radio stations, but no national, domestic broadcaster. Many
listeners tune to Somali-language media based abroad, in particular
the BBC Somali service. In secessionist Somaliland and Puntland the
authorities maintain a tight hold on broadcasting.

“Due to its unrecognized status, The Republic of Somaliland has no
official contacts with any other nation. The current foreign policy of
Somaliland is to try to secure international recognition as a
sovereign, stable country, so that international aid can be more
readily secured. Somaliland was independent for a 3 day period in
1960, between the end of British colonial rule and its union with the
former Italian colony of Somalia which status then continued until the
unilateral declaration reestablishing its independence in 1991.
Somaliland’s claims to sovereignty rests on its former independent
status. In addition, the fact that the rest of Somalia is in a state
of chaos while Somaliland is under stable government also lends
credence to its claim. The attitude of the United Nations and the
African Union on the preservation of existing national borders has so
far prevented recognition of Somaliland, despite the examples of the
former status of British Somaliland, and the fact that Eritrea
successfully broke away from Ethiopia and became a recognized country.
An African Union fact-finding mission that visited Somaliland in early
2005 recently published a report that recommended favorable
consideration for recognizing Somaliland’s independence.”

OR: HOW TO START A GOVERNMENT FROM SCRATCHhttp://www.somalilandgov.com/ “The population of Somaliland is estimated at around 3.5 million. The
average population growth rate is 3.1%. Population density is
estimated at approximately 25 persons per sq. kilometre. Fifty-five
percent of the population is either nomadic or semi-nomadic, while 45%
live in urban centres or rural towns. The average life expectancy for
the male is 50 and for females it is 55.

The Republic of Somaliland known as the Somaliland Protectorate under
the British rule from 1884 until June, 26th 1960 when Somaliland got
its independence from Britain. On July 1st 1960 it joined the former
Italian Somalia to form the Somali Republic. The union did not work
according to the aspirations of the people, and the strain led to a
civil war from 1980s onwards and eventually to the collapse of the
Somali Republic. After the collapse of the Somali Republic, the people
of Somaliland held a congress in which it was decided to withdraw from
the Union with Somalia and to reinstate Somaliland’s sovereignty.

The country has a republican form of government. The legislative
assembly is composed of two chambers – an elected elder’s chamber, and
a house of representatives. An elected President and an elected Vice-
president head the government. The President nominates the cabinet
which is approved by the legislature. There is an independent
judiciary

One of the provisions of the National Constitution of the Republic of
Somaliland is the establishment of a Bank to carry out Central Banking
functions. The bank of Somaliland (Baanka Somaliland) was thus
inaugurated in 1994 together with appropriate Banking Laws, to insure
that Banking regulations are carried out to the letter. Board of
Directors has accordingly been appointed together with a Governor of
the Bank, Vice-governor, and a Director General. In addition, the Bank
of Somaliland besides its functions as Central Bank, runs the
activities of Commercial sector.

The Bank’s main objectives are detailed in Article 3 of the
Constitutive Law of Somaliland Bank as follows: Fostering Monetary
stability maintaining the internal and external values of the
Somaliland Currency and promoting credit and exchange conditions
conductive to the balanced growth of the economy of the Republic and
within the limits of its powers, it shall contribute to the financial
and economic policies of the state.”

PUBLIC HOLIDAYS
1 MAY LABOUR DAY
18-19 MAY RESTORATION OF SOMALILAND SOVEREIGNTY
26 JUNE INDEPENDENCE DAY

The rising sun reveals two long lines of people snaking towards a
small concrete polling station in Gabiley, a town in rural Somaliland.
Many of them have walked considerable distances and queued all night
in order to vote in these, the first parliamentary elections held in
the territory for nearly forty years. But although voters across the
country have turned out in force, and although the election is deemed
free and fair by international observers, the result will not be
officially recognised beyond its territorial borders. Indeed, in the
eyes of the international community, Somaliland is a country that does
not exist.

Since its unilateral proclamation of independence in 1991, Somaliland,
an area the size of England and Wales in the north of Somalia, has
struggled to gain international recognition. Whilst neighbouring
Somalia has all but ceased to function as an administrative, judicial
and territorial entity, Somaliland has taken important steps towards
creating a stable working democracy in one of the poorest and most
dangerous regions of the world. A new constitution was adopted in 2001
following a referendum. In 2002 local elections passed off peacefully,
and in 2003 free and fair presidential elections took place. Having
thus laid the foundations of a functioning democracy, the
parliamentary elections of 29th September 2005 were seen as the final
step in the democratisation process and an important milestone in the
transition from a traditional clan-based, single-party-dominated
political structure to a stable multi-party democracy. Many
Somalilanders also regarded them as the final prerequisite for
international recognition.

However, despite the fact that Somaliland may fulfil the requirements
necessary for recognition as a sovereign state, the question of
recognition will be determined by a number of external geo-political
factors. These factors include the African Union’s position on the
sanctity of colonial borders and Somaliland’s role in the so-called
‘war on terror’.

Background
Somaliland was a British Protectorate for over eighty years during the
colonial period. In 1960, it gained independence but formed a hasty
union with the former Italian Somaliland to create the Somali
Republic. In 1969 Mohamed Siad Barre’s military coup brought Somalia’s
flirtation with democracy to an end and planted the seeds of a
secessionist struggle in Somaliland. This struggle culminated in a
brutal three-year civil war in which 50,000 people were killed and
half a million refugees fled. Between 1988 and 1991, Barre’s forces
massacred civilians, laid over two million mines and reduced cities to
rubble.

In 1991, the overthrow of Barre’s regime plunged Somalia into a state
of anarchy from which it is yet to emerge. Somaliland, however, was
quick to declare independence and, over the years, it has managed to
establish itself as a model of stability, good governance and economic
discipline. Rival militias have been demobilised, mines have been
cleared and refugees have been repatriated. The war-ravaged
infrastructure has been rebuilt and Somaliland now boasts modern
airports, hospitals, ports, power plants and universities. There is a
free press and the central bank manages an official currency with
relatively stable exchange rates. An unarmed police force and
independent judiciary maintain order.

What is most remarkable about this progress is that it has been
achieved with virtually no external help. Whilst economic development
has been heavily supported by Somalilanders in the Diaspora, lack of
international recognition has meant that Somaliland does not qualify
for bilateral aid or support from international financial
institutions. This international isolation has not, however, resulted
in isolationism. Lack of access to external aid has forced this
country of 3.5-million people to become more self-reliant than many
other African states. This self-reliance is reflected in what is
perhaps the most significant of Somaliland’s achievements: its system
of government.

Rather than having a Western democratic model of governance imposed
on them from outside, Somaliland has managed to fuse Western-style
institutions of government with its own traditional forms of social
and political organisation. Its bi-cameral parliament reflects this
fusion of traditional and modern, with the Senate consisting of
traditional elders, and the House of Representatives consisting of
elected representatives.

However, with its history of ‘tribalism’ and internecine fighting, the
key challenge for Somaliland’s new parliament is to try and replace
clan-based politics with party politics. For its first twelve years,
Somaliland had no political parties but instead followed more
traditional clan-based forms of political organisation. Political
parties were introduced during the presidential elections and it was
hoped that the recent parliamentary elections would help to usher in a
representative system without allowing representation to be overtly
clan-based. Clearly, if clan loyalties were to take precedence over
party loyalties, parliament would be seriously weakened. The
traditional clan-based political system had resulted in an under-
representation of some clans and it was hoped that having just three
non-clan-based parties would reduce the extent to which clan
allegiance affected the selection of candidates and the way in which
people voted. A limited number of political parties would force
alliances between clans to develop thereby increasing integration and
pluralism.

In the traditional clan system it is the male elders who make
decisions, and during the nomination process, many candidates were
indeed selected by elders along clan lines. The male-dominated nature
of the selection process was reflected in the fact that only seven of
the 246 candidates were female. There was also evidence that political
parties often chose candidates based on their perceived popularity and
support base. Whilst the absence of voter registration makes it hard
to analyse voter patterns, it would seem from the results that there
is some evidence that regional voting patterns reflect clan
preferences. There is also evidence however, that alliances were
sought between subgroups of different major clans across regions under
the different party umbrellas. This would indicate that, although
tribalism inevitably played some part in the election, it has been
weakened.

The election itself was very tightly fought. At one stage it seemed
inevitable that the president’s Democratic United National Party
(UDUB) would lose to the Solidarity Party (Kulmiye). However, UDUB was
able to use its powerbase as the governing party to maintain its
percentage of the popular vote, while Kulmiye lost considerable ground
to the Justice and Welfare Party (UCID). The close nature of the
result means that parliament will not be dominated by clan or party,
but will require much greater consensus-building coalitions. It will
nevertheless be interesting to see how party loyalties will be
negotiated against clan interests in the new parliament.

Election Day
Lack of international recognition meant that Somaliland was not able
to access forms of governance support commonly received by post-
conflict areas such as Iraq and Afghanistan. Nevertheless, the
elections were well organised and successfully conducted with over
800,000 voters turning out to the country’s 985 polling stations to
elect 82 members of parliament. This represents a turnout of over 90
per cent.

Like all elections in infant democracies there were some inevitable
teething problems of a practical, administrative and logistical
nature. The absence of a census and voter register meant that a
decision was made to allow voters to vote in any of Somaliland’s six
regions: the only requirements for voting being that voters were 16
years of age and spoke Somali. Inevitably, this led to widespread
attempts at underage and multiple voting. Due to the tradition of
women decorating their hands with henna it was decided that invisible
ink (and black lamps) should be used instead of indelible ink. This
generally proved an effective barrier to multiple voting; however
punishment for those caught varied. In some polling stations those
attempting to vote more than once were merely turned away, often only
to rejoin the queues. In other polling stations people had their shoes
and belts taken away and were made to sit outside the polling station
awaiting detention by the police. Whilst the fact that 30 per cent of
the population are nomadic makes census taking and voter registration
more difficult, there is confidence that both will be in place before
the local elections in 2007.

With illiteracy rates as high as 80 per cent and with many people
having had little or no experience of voting, substantial voter
education was attempted prior to the elections. In addition, ballot
papers had symbols beside the name of each candidate to make it easier
for those that could not read. On the day however, many voters, not
even knowing which way up to hold the ballot paper, chose to announce
their choice to the local chairperson, who marked the paper for them.
Whilst this compromised the secrecy of the voting process, it did not
seem to bother voters who were generally eager to talk about whom they
had voted for.

Shadow of Terror
The shadow that hung over the elections and continues to darken
Somaliland’s future is that cast by the threat of terrorism. On 25th
September the atmosphere in Hargeisa, Somaliland’s impoverished but
relaxed capital, changed. With the elections only days away, several
suspected Islamic militants were arrested following a shoot-out with
police. The following day a cache of arms, including heavy anti-tank
weapons, was discovered in the city. According to the Interior
Minister, one of the men arrested was a senior al-Qaeda operative
allegedly in the region to organise attacks on local leaders and
foreigners. This incident heightened fears of violence especially as
it coincided with the arrival of 76 international election observers
including potentially high-profile targets such as parliamentarians
from South Africa and Europe as well as a former US Ambassador. It
also provided a stark reminder of Somaliland’s precarious position in
the global war on terror.

Whilst Somaliland has managed to avoid the violent lawlessness and
extremism of Somalia, the discovery of Islamic militants in Hargeisa
does not come as a great surprise. Over the last two years, extremists
have murdered four foreign aid workers in Somaliland. Last month four
men were sentenced to death for murdering a British couple in 2003 in
a school they had built. Although the predominantly Sufi form of Islam
practised in Somaliland does not lend itself to extremism, concerns
have been raised by the presence of an increasing number of radical
clerics as well as the porous nature of the border with Somalia.
Mogadishu has become something of a haven for al-Qaeda-affiliated
fighters and Somalia was used as a transit point for the terrorists
who carried out the 1998 attacks on the US embassies in Kenya and
Tanzania, as well as the 2002 suicide bombing in Mombasa.

Whilst the threat of terrorism is clearly a problem for Somaliland, it
also presents an opportunity. Ironically, the discovery of al-Qaeda
operatives in the territory might do more to make Western governments
take notice of Somaliland than the free and fair conduct of their
elections. Somaliland is strategically positioned on the Gulf of Aden
and is also home to what could be an important navel base in Berbera.
Currently the only location in Africa where the US has a military base
is neighbouring Djibouti, and Somaliland is seen by the Americans as a
potentially important ally against the spread of extremism.

Somaliland is conscious that too close a relationship with the
Americans might not be popular with its population, but it also
recognises the advantages that collaboration with the US could bring
in terms of finance, security and long-term stability. By promoting
itself as a non-threatening strategic partner in the ‘war on terror’,
Somaliland could fast-track its entry into the international
community.

Recognition and beyond
Even if the US were to support Somaliland’s right to self-
determination, it is unlikely that they or any other country will
recognise Somaliland without the approval of the Organisation of
African Unity. One of the OAU’s central principles is that African
colonial borders should not be redrawn. This is based on a well-
grounded fear that recognition of ‘separatist’ states could cause the
continent to descend into chaos. However, there is a strong argument
that by breaking a union that it had entered into as an independent
state, Somaliland would be reverting to, rather than redrawing its
colonial borders. It is also worth noting that despite its reluctance
to acknowledge secessionist states, the OAU has recently recognised
the newly formed nations of Eritrea and Western Sahara. It is also
important to note that thirty new countries have been internationally
recognised since 1990, although most of these emerged from the
dissolution of the USSR and Yugoslavia.

Despite OAU intransigence, Somalilanders remain optimistic about the
possibility of recognition and the benefits it will bring. As well as
giving Somaliland access to bilateral aid, recognition would finally
give access to the mining and oil companies eager to exploit
Somaliland’s proven natural resources. Large-scale extraction of oil,
coal, gemstones and minerals could transform this country where 43 per
cent of the population are living in extreme poverty. Whilst
international recognition is not a panacea that will lift Somaliland
out of poverty or eradicate its problems with health, education, food
insecurity, water supply, and HIV/AIDS, it would undoubtedly speed
development.

Although there is still a distance to travel, Somaliland’s
accomplishments are impressive. It has created effective institutions
of state and attained a level of political maturity well beyond its
years. Somaliland provides a useful model of democracy that offers
lessons to us all. It reminds us that democracy is not a static,
prescriptive system but a living idea that is constantly adapting and
taking new forms. In Hargeisa, reminders of how far this small nation
has come are all around. When the rains come, a mass grave beside the
river is exposed. Bones protrude from the red earth, some still tied
at the wrist. Beside the airport road, a rusting Russian tank is
plastered with election posters: a reminder of Somaliland’s war-
ravaged past and a symbol of hope for a democratic future.

{Stefan Simanowitz is a writer and researcher. He was part of the
International Election Observer mission to Somaliland in September
2005.}

“Following the pattern of the Booroma National Charter, which
formalized the birth of Somaliland during 1993, a new entity – the
Puntland State of Somalia – was established in July 1998 out of a long
Constitutional process that lasted more than two months. The
institutional recognition of the role played by the traditional
leadership in Puntland in the seven-year period of peaceful self-
government in a stateless situation, has come only at the end of this
process. However, the mediation role of the elders has not been so
successful in other regions of Somalia for several reasons. Generally
speaking, outside the Majeerteen context, Somali society lacks a
stable hierarchy of paramount chiefs, and it follows that mediation
can achieve only a local dimension. Nevertheless, in the northwestern
regions (Somaliland) a regionalist feeling has widely spread in the
last thirty years. In this part of Somalia, after the collapse of the
State, the elders have collectively expressed this feeling better than
the SNM, frequently paralyzed by leadership competition.

The local concept of State sovereignty does not naturally match with
the rigid concept of State territory. Instead, it should expand in the
‘official’ territory of other countries in a flexible way and wherever
members of its community are found. This is exactly one of the options
offered to end the conflict and to reconstruct Somalia by the LSE
consultant to the European Union during 1995. Today, is effectively
put into effect in all Somali regions without respect of internal and
external borders. From another point of view, it is a slide back to a
legal status of the community group, confirmed by a citizenship which
corresponds to kinship. These are new elements of extreme importance
to those who are directly or indirectly committed to developing
alternative solutions in the African context, split up between State
sovereignty and ethnic allegiance. What is advancing in Somalia is a
more flexible and a more restricted idea of what the State is and
means in Africa (and elsewhere).”

Badhan, Somaliland, August 18, 2007 – The semi-autonomous regional
state of Puntland (Majeerteenya) declared this week that the recent
formation of `Makhir state’ by eastern Sanag residents is `a load of
hoo ha and a dream’. In a press statement, The Puntland Minister of
Information, Mr Abdirahman Banga in recent press statement strongly
condemned last week’s declaration of a new state in eastern Sanag. Mr
Banga said that the people behind the declaration of Makhir State are
dreaming because it doesn’t exist.

The minister stressed that this area is 100% in the hands and control
of Puntland, though the area recently saw bloody clashes between
forces loyal to Puntland and Somaliland. Soon after the minister’s
statement, the self-appointed President of `Makhir’ state, Mr Jibril
Ali Salad, who used to be a Somaliland parliamentarian, spoke to the
local media in response to the minister’s statements. Mr Salad said,
“Puntland has no business to talk about our new state, and they are
powerless to stop us, and do not have the ability to even come here”.

“Makhir state is acknowledged by its people as a fully-fledged state
independent of Puntland and Somaliland,” added Jibril Ali Salad.
Makhir state was established last week in the Badhan district of
eastern Sanag and its president is Jibril Ali Salad, who up to early
this year was a member of Somaliland’s parliament House of
Representatives. Somaliland’s government has not made any comment
regarding this newly-established enclave inside its border.

The roots of the destructive nature of the charcoal trade in Sanaag
region was due to lack of rules and regulations stemmed from the
collapse of the central Somali Government. This finally came to an end
since the declaration of Maakhir State. The Environmental Protection
Corps (EPC) of Maakhir State is growing in numbers and contributing to
a larger slowdown of charcoal trade and illegal gaming of wild
animals.

The authority in Maakhir State has banned charcoal trade because of
the environmental destruction and desertification that it does to the
fragile Somali environment. Traders drastically cut entire swaths of
forests, and as a result the trade was flourishing due to the high
demand for charcoal in the Arab Gulf States and other countries in
Asia. These are the reasons why the Environment Protection Corps are
confronting the charcoal profiteers and their militia that have been
menacing the Gebi Valley and Sool Plateau.

It is important to highlight that the newly established Maakhir
Authority did not receive any international aid for this effort. This
largely local effort has made an immediate impact on preserving and
protecting the environment in the Gebi Valley and Sool Plateau. As
indicated by the President of Maakhir Jibril Salad in last Thursday’s
press release; ” Maakhir Administration used traditional conflict
resolution methods to stop the traders and their militia, however
these militia are heavily equipped with automatic firearms who would
not cooperate, but the most effective and successful method for
limiting the harmful distress of our environment was creating and
using the EPC forces.”

The EPC in Maakhir apprehended more than 80 criminals over the past 4
months and jailed them in the district of Dhahar. The administration
constructed a new program of materials, structures, and training to
educate militia while they are held in jail. Jama Dahir Kodah, one of
the program directors of the EPC, told the media that their next
sustainable occurring project is to implement a plantation program in
the region.

The EPC is divided into three forces in the following areas of Maakhir
State and the main base is in city of Dhahar, the capital city of
Boharo region, the new region in Sanaag that Maakhir created:
1) The first battalion is responsible for the protection in vast areas
which stretches from Baragaha-Qol in Southern Sanaag to Eilbuh in
Central Sanaag.
2) The Second Battalion is responsible for an area which stretches
from Dhahar to Western Part of Bari region of Somalia near Boosaaso.
3) The Third and most important battalion have bases along the highway
that links Maakhir to Puntland and does stop and search in suspected
vehicles.

A new wind of change is blowing through Africa. The move from OAU
(Organisation of African Unity) to AU (African Union) is supposed to
be more than the dropping of one letter. It is supposed to represent a
shift from a “dictators’ club” to a people-based grouping. Everything
of course depends on implementation. And given the sad record – and
current problems, such as AIDS – there must be doubts about how much
can be achieved. AIDS alone is reducing life in some countries,
especially in southern Africa, to nothing more than an existence. Life
expectancies are being cut to levels unknown since the 19th Century.
The OAU was set up to develop Africa after colonialism – and to help
liberate Southern Africa from white rule.

Convenient
The African Union reflects the developments in many parts of Africa in
recent years, as democracy has started to take hold and a new emphasis
has emerged which concentrates less on the battles of the past and
more on the need to improve the lives of ordinary people. The key
shift is that the principle of state sovereignty has been abandoned.

It was the central belief of the OAU that nobody should interfere in
anyone else’s business. That was especially convenient for dictators.
Now the AU has as one of its aims the promotion of “democratic
principles and institutions, popular participation and good
governance.” It will have the right to initiate a so-called “peer
review” of a country’s record, intervene if there is genocide and war
crimes and impose sanctions. Everything of course depends on
implementation.

High hopes
Nobody is mourning the end of the OAU. Yet when it was founded in
Addis Ababa in 1963, Africa was full of pride and hope. Its leaders
were giants of their day. Africa was coming out of colonial rule and
many had led their nations to independence. It was a time to be bold.
One of the key figures was Dr Kwame Nkrumah, President of Ghana which
became independent (and dropped its colonial name the Gold Coast) in
1957. He believed that the African continent should be “united.” But
defining that unity was the problem. The OAU solved the problem by
praising unity in its language, but avoiding it in its practice. The
differences across the continent were just too many and the principle
which the OAU adopted, of non-interference and non-intervention,
simply meant that member states turned a blind eye to their
neighbours.

Tragedy
When one of the founding members, Emperor Haile Selassie of Ethiopia
gave a speech to the OAU, he was praised in its formal thanks for his
“wisdom.” When the man who overthrew him in 1974 (and later murdered
him and buried him under a latrine), Colonel Mengistu Haile Mariam,
subsequently welcomed delegates back to Addis Ababa, he was thanked
for his “warm and generous hospitality.” Colonel Mengistu went on to
declare his “red terror” in which tens of thousands of opponents were
slaughtered by his neighbourhood committees. It was one of the
tragedies of the OAU that all that happened in the city where it was
founded. There were coups all over the place – including Nigeria
(which had been the jewel in the British colonial crown in Africa and
the hope for parliamentary democracy), Libya (which brought Colonel
Gaddafi to power) and Uganda (in which Idi Amin rose to fame). Kwame
Nkrumah was overthrown in a coup himself. It symbolised the problems
Africa was having in developing stable government. The OAU could say
little and did nothing.

‘Interference’
Even after the recent elections in Zimbabwe, it was still bringing
forth its usual kind of statement when it objected to possible
American sanctions: “We are dismayed by this report, which amounts to
interference in the internal affairs of a member state.” It was more
successful over the years in trying to mediate in conflicts between
states. It helped mediate a border dispute between Algeria and Morocco
and between Somalia, Ethiopia and Kenya. One of the ironies was that
the OAU insisted on preserving the borders drawn by the colonial
rulers which often reflected spheres of influence rather than natural
divisions. The view at the time was also that Africa needed time to
settle down. And after all, it was achieving good economic growth of
about 5% a year in the 1960s. And the crisis in Southern Africa, where
white rule was being confronted, was regarded as more of a priority
for the OAU.

Faith lost
But Africa began to fail. Economic growth gave way to debt repayments;
the pioneering efforts to improve public health were swamped by AIDS,
wars were unending and famine stalked the land. The people lost faith
in governments and governments lost interest in the people. According
to Bernard Otabil of West Africa magazine: “The people did not feel
that the OAU satisfied their aspirations. It did not involve people on
the ground. It was top heavy.” The Secretary General of the OAU, Amara
Essy, who has helped to bring the new African Union about, was
scathing about the old grouping: “The OAU is the most difficult
organisation I have ever seen”, he told New African magazine. Mr
Otabil believes that the African Union is on the right course because
it is less grandiose and hopes to be more community based. It is also
offering an economic dimension and seeks African integration into the
world economy. One of the main tasks for the AU will be to push
forward with Nepad, the New Partnership for Africa’s Development. This
offers a bargain with the West – you give us aid and we will put our
house in order. It is a long way from 1963.

Hopes of recognition for Somaliland’s 15-year independence have been
raised by the favourable report of an African Union mission that
visited the territory last year. The report, a copy of which the Mail
& Guardian has obtained, comes at a time when signs of a new
flexibility in African thinking on boundary issues are emerging. It
suggests that official African aid be tapped by this country of
3,5million people that was effectively destroyed by the Somali
dictator Siad Barre. With the fall of Barre in 1991, the former
British colony broke its union with southern neighbour, the former
Italian colony of Somalia. Since Barre’s departure, Somalia has been
without an effective government.

But Somaliland has pulled itself up by its bootstraps. It has had a
referendum to adopt a democratic Constitution and has organised
presidential and parliamentary elections. Independent international
observers have endorsed all of these. The Organisation of African
Unity refused to recognise Somaliland’s independence, citing the maxim
that there would be chaos if colonial boundaries were not observed in
post-independence Africa.

Unions between Senegal and Gambia, and Egypt and Sudan, among
others, have been broken without affecting the recognition of these
countries. The AU mission accepts this, stating in its report that
Somaliland’s “case should not be linked to the notion of ‘opening a
Pandora’s box’. As such, the AU should find a special method for
dealing with this outstanding case. “The lack of recognition ties the
hands of the authorities and people of Somaliland, as they cannot
effectively and sustainably transact with the outside to pursue the
reconstruction and development goals.

“Furthermore, given the acute humanitarian situation prevailing in
Somaliland, the AU should mobilise financial resources to help
alleviate the plight of the affected communities, especially those
catering for the internally displaced persons and the returnees.
Finally, given also the high potential for conflict between Mogadishu
and Hargeisa, the AU should take steps to discuss critical issues in
the relations between the two towns. That initiative should be taken
at the earliest possible opportunity.”

Iqbal Jhazbhay, an Africa analyst at the University of South Africa,
says the report illustrates a new mood in the AU, an organisation
Somaliland has officially applied to join. “The AU-sponsored peace
deal in Sudan allows for a referendum, five years from now, on whether
the south wants to go it alone. This could not have happened if it
were business as usual. The AU now goes for results, and takes account
of subjective facts and practical realities,” says Jhazbhay. “The AU
clearly recognises the stability created in Somaliland and the
infrastructural development. It is determined to bring peace to the
horn. It is looking at post-conflict reconstruction and it has the
capacity to handle these issues.”